The euro fell from a five-month high against the dollar on Monday as nagging worries about fiscal debt problems in eurozone countries such as Ireland gave traders an excuse to consolidate gains. Monday's downgrade of Anglo Irish Bank's lower-grade debt pushed the euro to session lows, highlighting concerns about the eurozone.
That led to the widening of the Irish/German 10-year bond yield spread as investors demanded additional premium to hold Irish government bonds over benchmark Bunds. The increase in the yield spread also helped push the euro lower after hitting the five-month high above $1.35 earlier.
The euro rose as high as $1.3507, according to electronic trading platform EBS, its highest since April. It was last at $1.3462, down 0.2 percent on the day. The euro's next short-term key level was around $1.3511, a 50 percent Fibonacci retracement of its fall from $1.5145 last November to its June low around $1.1876.
The dollar index fell to 79.188, the lowest since early February. It last traded at 79.399, down 0.3 pct. The dollar index broke below 80 last week, where the 55- and 200-weekly moving averages were located. Traders said with the index closing below 80, the signal on the charts has become bearish, opening the way for a move down to at least 75.
Comments
Comments are closed.