Euro sinks to four-year low against US dollar

| May 17, 2010 | 0 Comments
Euro sinks to four-year low against US dollar

The euro continues to lose value after sinking to a four-year low of $1.2306 over the weekend, while one pound was worth €1.1702.

The further fall came after fears over the ongoing debt crisis in the euro zone were raised.

It is feared that the tough austerity measures introduced in many euro zone economies to cut deficits, could hamper growth within the euro zone.

A report over the weekend by the International Monetary Fund (IMF) said that despite the recovery in the global economy, the world’s wealthiest economies urgently need to tackle their debt levels.

“If public debt is not lowered to pre-crisis levels, potential growth in advanced economies could decline by over half a per cent annually, a very sizable effect when cumulated over several years,” the report said.

In the meantime, Asian stocks were hit today with shares in Japan and Korea falling sharply.

Earlier this month, the European Union and IMF agreed a package worth €750 billion (£644 billion) to try to prevent the Greek crisis from spreading to other weak euro zone economies.

Stocks and the euro recovered after the rescue package was announced but fears have returned and it appears that investors are becoming jittery again.

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