Euro sinks to five-month low after Chinese data
Friday, 22 January 2010
TOKYO, Jan 21 (AFP): The euro fell to a new five-month low against the dollar in Asian trade Thursday as worries that China will take fresh steps to cool its economy reduced demand for risk-sensitive currencies.
The European unit dropped to 1.4067 dollars at one point, the weakest since August 17. In late Tokyo trade it stood at 1.4094, down from 1.4103 late Wednesday in New York.
The dollar gained to 91.57 yen from 91.23. The euro rose to 129.10 yen from 128.68.
The euro was hit by a combination of worries about the outlook for the eurozone economies, Greece's fiscal woes and the prospect that Beijing will take more steps to prevent overheating in its economy, dealers said.
The euro is seen as more vulnerable than the "safe haven" dollar to any disappointment over the pace of the global economic recovery.
China reported its economy expanded by a blistering 10.7 per cent in the fourth quarter of 2009 compared with the same period a year earlier, and by 8.7 per cent for the whole of 2009.
"The China data were strong, so people are now even more anxious over when the authorities might again try to apply the brakes on the economy," Yasuo Nakayama, manager at Shinkin Central Bank, told Dow Jones Newswires.
The figures "put even more downward pressure on the euro," Nakayama added.
China's banking regulator said Wednesday it would rein in loan growth this year.
"The economy is growing firmly, and this is an outcome China wants," said Patrick Bennett, a currency analyst at Societe Generale in Hong Kong.
"Nevertheless, the (government's) policy will be tweaked to ensure the economy does not grow too fast," he added.
The European unit dropped to 1.4067 dollars at one point, the weakest since August 17. In late Tokyo trade it stood at 1.4094, down from 1.4103 late Wednesday in New York.
The dollar gained to 91.57 yen from 91.23. The euro rose to 129.10 yen from 128.68.
The euro was hit by a combination of worries about the outlook for the eurozone economies, Greece's fiscal woes and the prospect that Beijing will take more steps to prevent overheating in its economy, dealers said.
The euro is seen as more vulnerable than the "safe haven" dollar to any disappointment over the pace of the global economic recovery.
China reported its economy expanded by a blistering 10.7 per cent in the fourth quarter of 2009 compared with the same period a year earlier, and by 8.7 per cent for the whole of 2009.
"The China data were strong, so people are now even more anxious over when the authorities might again try to apply the brakes on the economy," Yasuo Nakayama, manager at Shinkin Central Bank, told Dow Jones Newswires.
The figures "put even more downward pressure on the euro," Nakayama added.
China's banking regulator said Wednesday it would rein in loan growth this year.
"The economy is growing firmly, and this is an outcome China wants," said Patrick Bennett, a currency analyst at Societe Generale in Hong Kong.
"Nevertheless, the (government's) policy will be tweaked to ensure the economy does not grow too fast," he added.