Euro falls amid uncertainty in Europe

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Euro falls amid uncertainty in Europe

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The euro fell after the downgrade of Italian sovereign debt by ratings agency Standard & Poor's.

20 September,2011 11:47 am

The euro was down to $1.3609 in Tokyo afternoon trade from $1.3679 in New York late Monday. The European common currency also retreated to 104.14 yen from 104.89 yen. The dollar was rangebound at 76.51 yen against 76.59 yen.The euro briefly fell below $1.36 following news that S&P on Monday downgraded Italys sovereign debt rating, citing economic, fiscal and political weaknesses in the eurozones third-largest economy.The news reduced risk appetite, prompting a sell-off on Asian stock markets.S&P said it was lowering the rating by one notch to A, which is five steps above junk territory, because of Italys weakening economic growth prospects.The picture in Europe, full stop, is not getting any better. They can patch up any way they want the Greek situation but the problem is going to persist, HiFX senior trader Stuart Ive in Auckland told Dow Jones Newswires.If it doesnt persist in Greece, it will persist in Portugal or Ireland, or Italy or Spain, Ive said.A dealer at a major bank in Tokyo said: The European problems, including the Greece one, are transforming into an issue of the global financial markets deleveraging.The news of the downgrade gave additional fuel to concerns over Greeces possible default and its mooted contagion over the continent after a weekend meeting of eurozone finance ministers failed to make major headway in tackling the issue.Greece was to continue talks with the IMF and EU on Tuesday after being warned to tighten austerity measures and ramp up state asset sales to secure rescue funds and stave off bankruptcy early next month.Greece is under pressure from its international creditors to implement further austerity measures in order to gain the next slice of funding under a first 110-billion-euro ($150-billion) rescue plan unveiled last year.The dollar was higher against regional Asian currencies.It rose to Sg$1.2692 from Sg$1.2605 a day earlier, to 1,155.20 South Korean won from 1,133.68 and to Tw$29.95 from Tw$29.70.The greenback also climbed to 9,040.00 Indonesian rupiah from 8,898.75, to 43.66 Philippine pesos from 43.55 and to 30.60 Thai baht from 30.46.