Euro fell to a four-month low against the dollar and a three-month low versus the yen during the European trading session as risk aversion was driven by political uncertainty in Greece. The inability for Greece to form a government since the May 6 elections and squabbling by politicians over austerity measures is putting at risk the EU/IMF bailout package. Concerns are growing over the possible exit of Greece from the euro.
Further weighing on the euro was data that showed that industrial production in the euro zone fell unexpectedly in March, adding to fears over the region’s recovery. Industrial production dipped by a seasonally adjusted 0.3 percent in March, defying expectations for a 0.4 percent increase. Spanish and Italian bond yields are rising today.
EURUSD opened in Europe at 1.2890 and edged lower to 1.2860, the weakest since January 19.
EURJPY fell to 102.63, the lowest since February 16.
EURGBP slid 0.23 percent to 0.8004.
Sterling weakened against a broadly stronger US dollar. GBPUSD hovered at a three-week low of 1.6050.
USDCHF climbed steadily to a fresh four-month high of 0.9337 to gain 0.3 percent so far on Monday.
USDJPY reverses earlier session gains, falls back under 80.00 from a 80.17 high.
Aussie suffered big losses to fall to a five-month low against the greenback, losing 4.7 percent in the past two weeks. AUD fell to a trough of 0.9961. Risk aversion usually affects growth-sensitive and commodity-linked currencies like the aussie.