Euro hits 4-year low

Informed minds are noticing the Euro hitting a 4-year low.


The euro hit another four-year low against the dollar on Tuesday as worries that European banks could still face large loan losses next year added to concerns about the continent’s economic outlook.

The euro hit $1.2112 in European trading – its lowest since it sank as far as $1.2029 in April 2006 – before pulling back up to $1.2169, still below the $1.2243 it bought a day earlier.

The European Central Bank said late Monday that although it estimates that potential loan write-downs for the continent’s bank system will peak this year, “it is probable that loan losses will remain considerable in 2011 as well.”

“This prospect, combined with continued market and supervisory authority pressure on banks to keep leverage under tight control, suggests that banking sector profitability is likely to remain moderate in the medium term,” it added.

The euro has been battered recently by worries over Europe’s debt crisis and its implications for future growth – underlined Friday by a rating downgrade for Spain, prompted by concern that the government’s austerity measures will weigh on growth.

There is plenty more in the linked article.


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