Euro slumps in midday trade

The euro fell to a near four-month low against the dollar on Friday, hit by uncertainty about the use of eurozone bonds of peripheral countries as collateral for bank loans and as US employment data supported a stronger outlook for the dollar than the euro. In midday trading, the euro fell as low as $1.2915 on trading platform EBS, its lowest since early mid-September. It was last at $1.2928, down 0.6 percent on the day. Traders also took out options barriers at $1.2950 and $1.2925.
Support for the euro in the $1.2915 area from sovereign buyers has prevented its collapse, traders said. By midday, euro/sterling was the biggest mover of the day, falling 1.2 percent to 83.06 pence The dollar was up 0.3 percent against a basket of major currencies to 81.026, rising as high as 81.094, its strongest level since early December.