Euro Closes the Week at 12-Year Low against the Yen

By TraderVox.com

Tradervox.com (Dublin) – The euro has continued to decline against the Japanese currency for the fourth week in a row. It closed the week at 12-year low after concerns the region’s debt crisis is worsening increased the demand for safety as the market went into the weekend. Most traders went for the yen, as the demand for the US dollar was dampened by bets on Federal Reserve’s action to stimulate economic growth in the country. The greenback remained unattractive to investors prior to release of data this week expected to show a slowdown in US growth. The Australian dollar closed the week on a high as implied volatility fell to five-year low allowing traders to buy riskier assets. The 17-nation currency dropped despite the approval by European officials on Spanish banks’ loan.

According to Joe Manimbo who is a market analys at Western Union Business Solutions in Washington indicated that there is increased uncertainty in the market which has led to investors running away from the euro. He also added that there is a general hope for additional stimulus from major central banks around the world hence the continued demand for riskier assets.

The 17-nation currency dropped to the lowest levels since 2008 against the pound and dropped to new lows against the Australian dollar. The Spanish borrowing cost also increased to euro-era high which has added to speculations of adverse times ahead for the region. The euro zone currency dropped by 1.6 percent against the yen to trade at 95.43 yen on Friday in New York to record a weekly drop for the fourth week in a row. The euro had touched its lowest since November 2000 of 95.35 yen earlier in the day. The euro also continued to drop for the third week against the greenback, registering a 0.8 percent drop to trade at $1.2157, it also touched its June 2010 low of $1.2144 during trading on Friday.

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