In early Asian deals on Monday, the euro extended its Friday’s decline against most major currencies amid persistent worries about debt problems in Europe and rising tensions on the Korean Peninsula. The euro dropped to a 13-day low against the yen, 18-day low against the US dollar and a new record low against the aussie.
The single currency was dented by Moody’s Investors Service downgrading Ireland to Baa1 from Aa2 on Friday, saying the government’s financial strength could deteriorate due to pressures from its ailing banks or because of slower-than-expected growth.
The mood was further dimmed by South Korea’s military deciding to go ahead with its planned live-fire drill on the border island Yeonpyeong on Monday or Tuesday.
North Korea had warned that it would strike back if the exercise takes place, and that it would be deadlier than the encounter that took place on November 23 in which two civilians and two soldiers were killed and dozens of homes were damaged.
The euro declined against the yen in early Asian deals on Monday. The euro-yen pair is currently trading near a 2-week low of 110.29, compared to last week’s close of 110.68. On the downside, 108.4 is seen as the next target level for the European currency.
During early Asian deals on Monday, the euro fell to an 18-day low of 1.3127 against the US dollar. The next downside target level for the euro is seen at 1.297. At last week’s close, the euro-dollar pair was quoted at 1.3188.
The euro plunged to a new record low of 1.3294 against the Australian dollar in early Asian session on Monday. The euro-aussie pair closed Friday’s trading at 1.3346.
In early Asian deals on Monday, the euro slipped against the currencies of U.K., New Zealand and Switzerland. The euro is presently worth 0.8475 against the pound, 1.2746 against the franc and 1.7830 against the kiwi, down from Friday’s close of 0.8493, 1.2796 and 1.7910, respectively. If the euro weakens further, it may likely target 0.835 against the pound, 1.776 against the kiwi and 1.272 against the franc.
Looking ahead, Japan will release its final leading indicator for October at 12:00 am ET. Also, the Bank of Japan will kick off its two-day monetary policy meeting today and will announce its decision on interest rates on Tuesday.
German November PPI and the Eurzone October current account are expected in the European session.