The European currency lost ground against its major counterparts in early trading on Monday on renewed concerns that the persisting Irish debt woes may spread to other vulnerable eurozone economies like Portugal and Spain.
Earlier on Sunday, the European finance ministers have reached agreement over an 85 billion-euro bailout financial assistance package for the Republic of Ireland. Around 35 billion euros will go into propping up the Republic’s banking system, while the remaining 50 billion euros will cover the day-to-day financing of the state.
Eurozone’s revised growth forecast for 2010 and the coming year also likely influenced the euro, with the European Commission said it expects euro area real GDP to grow 1.7% this year, nearly double the 0.9% growth projected in its spring forecast released in May. At the same time, the Commission maintained its outlook for 2011 at 1.5%.
The euro plummeted to 1.3153 against the US dollar by 7:10 am ET, the lowest level since September 21. Despite a brief correction in the middle of the month, the euro has been trading weaker against the greenback and depreciated almost 8 percent thus far this month from its November 4th multi-month peak level of 1.4283.
The next downside target for the euro-buck pair is seen around the 1.3115 level. The pair that settled Friday’s trading at 1.3248 is currently quoted at 1.3155.
The single currency also slumped to more than a 2-month low of 1.3180 against the Swiss franc by this time, down by 0.8 percent from Friday’s close of 1.3284. If the euro weakens further, it may test support around the 1.3110 level.
The euro erased its early morning profits against the pound in early trading, slipping to 0.8449 around 6:40 am ET, down almost 0.8 percent from a 6-day high of 0.8519 hit earlier in the Asian session. In near-term, the common currency may find target around the 0.8430 level. The pair closed last week’s deals at 0.8499.
The European currency also reached as low as 110.73 against the yen before holding steady around 6;20 am ET. The euro-yen pair that finished Friday’s deals at 111.36 is presently quoted at 110.83. On the downside, 110.50 is seen as the next likely target level for the euro in near-term.
Retail sales in Japan were down a seasonally adjusted 1.9 percent in October compared to the previous month, the Ministry of Economy, Trade and Industry said today. That was sharply lower than analyst expectations for a 0.7 percent monthly decline following the revised 2.8 percent plunge in September.
On an annual basis, retail sales were down 0.2 percent – again missing expectations for a 0.7 percent increase after climbing a revised 1.4 percent in .the previous month.
The euro is currently trading at 1.3431 against the Canadian dollar and this set the lowest point for the pair since September 20. The euro-loonie pair, which ended last week’s deals at 1.3526, is presently quoted at 1.3435. On the downside, the single currency may breach the 1.3350 support.