Possibility of giving up euro real: Greek PM

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Possibility of giving up euro real: Greek PM

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The euro fell to $1.2582 against the dollar after Greek PM hinted at quitting euro.

24 May,2012 12:35 pm

The euro hit its lowest point against the dollar since July 2010 on Wednesday ahead of a European Union summit aimed at dealing with the threat that Greece could exit the eurozone.A day after former Greek Prime Minister Lucas Papademos warned that the possibility that Athens could give up the euro is real, the euro fell to $1.2582 against the dollar at 2100 GMT, from $1.2684 late Tuesday.The ongoing decline in euro/dollar is mirroring the decline in the willingness of investors to carry any unnecessary risk, ETX Capital trader Markus Huber told AFP.Investors are continuing to become even more risk averse than they have already been before, factoring in the notion that the EU summit wont be yielding much in a way of bringing calm into the financial markets at least in the short term, he said.French President Francois Hollande stressed the importance of immediate action to quell worries in the markets, but there was still a clear division in the euro area over tactics, with Germany standing steadfast against issuing region-based eurobonds to raise funds against contagion.I say that we have to act straightaway for growth ... otherwise there will still be doubt on the markets, said Hollande.The markets were unsettled by Papademos comments to Dow Jones Newswires Tuesday. The risk of Greece leaving the euro is real and it depends effectively on whether the Greek people will support the continued implementation of the economic program, he said.It cannot be excluded that preparations are being made to contain the potential consequences of a Greek euro exit.Safety-seeking investors pushed into the yen, driving it higher.The euro bought 99.96 yen, compared to 101.45 yen Tuesday, and the dollar was at 79.45 yen from 79.98.The dollar rose to 0.9543 Swiss francs from 0.9468; the British pound slipped to $1.5689 from $1.5766.