Euro reaches one-year low against US dollar

Wednesday, May 5, 2010

The euro fell to a one-year low against the US dollar earlier yesterday, over fears that the bailout package proposed for the ailing Greek economy would not prevent financial troubles elsewhere in Europe.

The currency reached $1.3088 against the dollar — a level not seen since April of last year — although it recovered slightly to end the day at $1.3094. However, that was still lower than the $1.3212 it traded for on Monday. The euro also lost 1.6% against the yen, to a trading level of Y122.81, and 0.3% on the pound, going down to £0.8632.

The euro is losing strength as the Eurozone is struggling to prevent the Greek economy from defaulting on debts; a rescue loan package worth 110 billion euros (US$145.62 billion) is currently underway to help ease the crisis. Michael Hewson, who is a currency analyst for CMC Markets, commented that the euro probably will "continue to remain under pressure over the coming days."