Monday, 29 Nov 2010

EUR/USD Hits Lowest Price Since Sept.

The euro sank to two-month lows against the dollar on Monday, with more weakness expected as investors were left unimpressed with Ireland's rescue package and remained fearful that another debt-burdened euro zone economy could be bound for a bailout.

Analysts expect further losses in the euro given the uncertainty surrounding the fiscal outlook of the region's peripheral countries. The next key target is $1.30 after the euro fell below the 200-day moving average around $1.3130.

European Union finance ministers endorsed an 85 billion euro rescue package for Dublin and approved outlines of a permanent crisis-resolution system that could make private bondholders share the burden of restructuring sovereign debt after 2013.

The euro fell to $1.3117, down 0.9 percent on the day, but above a two-month low of $1.3065. The euro fell below a key level, the 50 percent retracement from the early June lows to early November highs, at the $1.3080 level.