Currency Exchange UK

 

Euro Slumps Versus Dollar and Yen

Euro Slumps Versus Dollar and Yen

The euro fell against the dollar and the yen on Thursday, as investors rushed to the relative safety of the latter currencies.  The main cause for risk aversion in the market was renewed fears on the health of the global economy, plus another round of sovereign debt fears on Europe.

On Wednesday, US Federal Reserve representatives had announced that they are to keep the central interest rate at its current near-historic low.  

Additionally, the low rate will remain for some time – the Fed said that rates would be kept down for an “extended period”.

This had been widely expected, but the Fed went on to indicate that economic growth in the US was losing support.

The euro also received impact from a drop in Greek government bonds and European stocks as a whole.  Investors around the world pointed their attention to the European debt crisis which has continually affected markets since the start of the year.

It is now feared that a slower economic recovery will affect and worsen Greece’s debt problems.

Over in Australia, the Aussie dollar gained against the New Zealand dollar after Kevin Rudd resigned as Prime Minister, thereby leaving the first woman to take the position – Julia Gillard was sworn in shortly afterwards.