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Euro down to new lows against U.S. dollar

If you’re an American, especially if you’ve spent a lot of money while visiting Europe, you may feel like this is long-awaited karma. After several years of tight spending by Americans in Europe (with a higher-valued euro currency), the Euro currency has hit a new four-year low of about 1 to $1.19, amid the Greece financial crisis and speculation about Portugal’s and Spain’s national debt levels.

The New York Times has an excellent article about debt in the EU and who owns it.

…IT’S a $2.6 trillion mystery.

That’s the amount that foreign banks and other financial companies have lent to public and private institutions in Greece, Spain and Portugal, three countries so mired in economic troubles that analysts and investors assume that a significant portion of that mountain of debt may never be repaid.

The problem is, alas, that no one — not investors, not regulators, not even bankers themselves — knows exactly which banks are sitting on the biggest stockpiles of rotting loans within that pile. And doubt, as it always does during economic crises, has made Europe’s already vulnerable financial system occasionally appear to seize up…

BBC has a good piece on this.

The euro has hit a new four-year low against the dollar after comments from French Prime Minister Francois Fillon suggested its weakness was “good news”.

The euro fell 1.4% to $1.19920, marking the first time the currency had fallen below $1.20 since March 2006.

Mr Fillon said he saw only “good news” in euro-dollar parity.

But a later clarification said the reference to “parity” was about the general evolution of the two currencies’ exchange rate.

Swiss role
The euro tumbled to a record low against the Swiss franc as well, falling to 1.3865 francs.

Like the US dollar, the Swiss franc is also perceived as a relatively safe currency in times of economic uncertainty.

Also on Friday, the value of Hungary’s currency, the forint, fell by 5.6% against the euro, amid growing fears that the country could be facing a Greek-style debt crisis.

Many homeowners in Hungary have mortgages denominated in Swiss francs, because of the low interest rate in that currency, and markets are concerned that Hungarians might default on those loans.

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  1. July 23rd, 2010 at 01:30 | #1

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  1. June 7th, 2010 at 01:26 | #1

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