Belfast Telegraph

Euro at four-year low against dollar

By Symon Ross

The euro has slumped to another four-year low against the US dollar after more negative economic news from the eurozone.

The single currency has slumped in recent months amid concerns about the spreading European debt crisis, which have caused investors to lose faith in the euro as a reserve currency.

The European Central Bank said that European banks could write down another €90bn (£75bn) this year, linked to bad loans and falling asset values with a "second wave" of potential loan losses over the next 18 months due to the financial crisis. The ECB has now increased purchases of eurozone government bonds.

The euro fell as low as $1.2110 before recovering to $1.2193. It also fell against the pound from £0.8535 to £0.8447.

City expert Phil McHugh, of Currencies Direct, said the euro could slide further. "The recent Spanish banking fears alongside the debt downgrades have put further pressure on the euro."

Last week the credit rating agency Fitch downgraded Spain's sovereign rating, dealing another blow to the single currency.