Euro Snaps Out of Its Torpor as Banking Troubles Roil Marketsby
Deutsche Bank concerns send single currency to one-week low
It’s ‘finally’ responding to ‘growing fear’: Credit Agricole
The euro fell to the lowest level in more than a week amid fading confidence in Deutsche Bank AG’s finances.
Europe’s single currency ended two days of stasis versus the dollar and dropped against most of its major peers as about 10 hedge funds were reported to have moved to reduce their exposure to the biggest German lender. The yen was supported as stocks tumbled across Europe, sending investors rushing for havens.
“The euro is finally starting to respond to the growing fear,” said Valentin Marinov, head of Group-of-10 currency strategy at Credit Agricole SA’s corporate and investment-banking unit in London. “Markets are spooked by the stories about clients cutting exposure to the troubled German lender.”
Europe’s 19-nation currency dropped 0.5 percent to $1.1172 as of 7:20 a.m. in New York, and touched $1.1163, the lowest since Sept. 21. It had been little changed this week until today. The yen appreciated 0.3 percent to 113.03 per euro.
The euro has been resilient even as the European Central Bank eases policy amid speculation it’s running out of ammunition for its quantitative-easing program.
The currency is set for a monthly gain versus the dollar, but its long-term performance has been even better on a trade-weighted basis, with a fourth straight monthly gain that matches the streak in late 2013.