Euro Tumbles To New Lows Amid Concern About Greek Exit

Wednesday, May 23, 2012

 
   By Matthew Walter 
   Of DOW JONES NEWSWIRES 
 

NEW YORK (Dow Jones)--The euro fell to its lowest level since July 2010 on concern that European leaders meeting at a summit will fail to reach a solution to keep Greece in the euro zone.

The common currency has plunged 1.9% over the past two days, as investors increasingly bet on a destabilizing Greek exit from the monetary union. The rapidly deteriorating market sentiment has fueled demand for safe havens such as the dollar and yen, weighing on other currencies.

The euro was at $1.2582, down from $1.2684 late Tuesday, according to EBS via CQG.

"This is very simply the fulfilling of the scenario" of a possible Greek exit, said Carl Forcheski, director of foreign exchange at Societe Generale in New York. "We've been talking about this for weeks. Well, its happening. This is it."

With weaker peripheral European economies, such as Greece and Spain, continuing to struggle with high unemployment and economic recession, the euro zone's leaders remain divided over how to move forward. Former Greek Prime Minister Lucas Papademos warned Tuesday that there is a real risk his country will decide to leave the currency union.

-By Matthew Walter, Dow Jones Newswires; 212-416-2910; matt.walter@dowjones.com

(END) Dow Jones Newswires

May 23, 2012 11:14 ET (15:14 GMT)