Date: Monday 17 May 2010
Concern over European debt sent the euro sharply lower against major currencies on Friday.
The euro had been given a boost at the start of the week by the announcement of a European rescue package worth nearly $1trn but as the week progressed, jitters about economic instability in the area returned. The euro fell to $1.2275, the lowest level in over two years.
Traders moved into safe havens such as the dollar ahead of the weekend, sending the dollar index, which measures the US currency against a basket of six others, up to 86.04.
As yet another European country announced austerity measures to fight a ballooning deficit, traders worried about economic growth. Portugal followed Spain in announcing fresh tax rises to help reduce the country’s debt. However there is concern that economic growth will be stifled.
The yen rose on the back of safe haven demand, up at 92.21 yen from 92.66 yen on Thursday.
Sterling remained jittery on Friday, falling against the dollar, on concern about how the new coalition government will tackle the UK’s huge deficit.
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