WORLD FOREX: Euro Falls To 1 1/2-Week Low Vs Dollar
By Riva Froymovich
The euro fell to a one-and-a-half-week low against the dollar Monday morning as U.S. stocks declined amid fresh turmoil in the auto and financial sectors.
Risk appetite in the currency markets is also down ahead of Thursday's Group of 20 summit and European Central Bank meeting, with traders waiting to see the results.
Leaks of the draft G20 communique indicate there won't be a fresh round of coordinated stimulus spending coming from the April 2 summit, a cause for concern for the euro, whose monetary authorities have been unwilling to match U.S. efforts, according to strategists.
However, the euro was boosted very slightly from its lowest intraday levels on comments by ECB chief Jean-Claude Trichet Monday.
He told the European Parliament that the euro-zone economy has weakened since January and that there is "a high degree of uncertainty" surrounding the economic outlook. But, he said there are no significant risks for deflation and that the central bank will do what is needed to cope with the financial crisis.
Trichet also added that the central bank will achieve its medium-term objective, to keep inflation below but near 2%.
Monday morning in New York, the euro was at $1.3162 from a low of $1.3114 and from $1.3298 late Friday. The dollar was at Y96.99 from an overnight low of Y95.96 and from Y97.91 late Friday, according to EBS. The euro was at Y127.66, off a two-week low of Y126.43 Monday, and from Y130.20 Friday. The U.K. pound was at $1.4202 from $1.4286, and the dollar was at CHF1.1522 from CHF1.1438.
The Obama administration auto task force, after more than a month of analysis, suggested that the best chance for success for General Motors and Chrysler "may well require utilizing the bankruptcy code in a quick and surgical way." Using the threat of withholding more bailout money, the administration forced out General Motors Corp. Chief Executive Rick Wagoner.
The euro is under additional pressure after a monthly survey by the European Commission showed business and consumer confidence in the 16 countries that use the euro weakened to a record low in March as new orders continued to dry up and concerns about job losses mounted.
source :The Wall street journal
