Friday, 4 Jun 2010

EUR Declines Heavily on Risk Flight

The Euro plummeted to its lowest level in more than four years Friday, sinking decisively below the key $1.20 level, after a disappointing U.S. jobs report added to fears the Euro-Zone sovereign-debt crisis was spreading across the region, leading investors to file strongly out of riskier assets.

The Euro had already been under pressure, hitting an earlier four-year low, on worries Hungary would join its fiscally stressed Euro-Zone neighbors in a struggle with sovereign debt.

The worse-than-expected U.S. jobs data only added fuel to the fire, causing investors to question the pace of the global economic recovery, and leading them to flee riskier assets for the perceived safety of the dollar, yen and Swiss franc. The flight to safety gathered steam as U.S. stocks sold off even further into the late afternoon, dropping more than 3%.