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Euro-Zone Instability Leads to Heavy EUR Losses
Submitted by Forexyard on Mon, 28/05/2012 - 09:16
The euro continued to fall against several of its main currency rivals on Friday, as fresh concerns regarding Spain's ability to manage its debt caused investors to abandon riskier assets. In addition to the almost two-year low hit against the US dollar, the common currency also took heavy losses against the British pound and Japanese yen.
The EUR/GBP fell 65 pips during mid-day trading before closing out the week at 0.7989. The EUR/JPY fell 85 pips over the course of the day, reaching as low as 99.46 before correcting itself to finish the week at 99.70.
This week, euro traders will want to pay attention to any announcements out of the euro-zone regarding the upcoming Greek elections. Any signs that anti-austerity political parties could win in the elections may drive the euro lower. In addition, an Italian bond auction on Wednesday could be an important indicator of whether the crisis in Greece is spreading to other euro-zone countries.
Finally, the US Non-Farm Payrolls figure on Friday typically leads to volatility throughout the marketplace. Should the figure show improvements in the US labor sector, the euro may take additional losses as a result.