Euro Hits Bottom! March 20, 2009
By: Danelle
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The Euro hit five-month lows against the dollar and British pound today as the Euro's decisive break under a key support level prompted widespread selling. The euro fell as low as $1.4166, its weakest since mid-August, after breaking through its 200-day moving average around $1.4295, which had been considered a key support level. Selling accelerated after stop-loss orders were triggered under that level. The last time the Euro was this low was in August 2008.
Carl Hammer, a currency strategist at SEB in Stockholm, said "We could see a continued slide in the euro, but we do acknowledge that the market is becoming overstretched (in selling the currency)."
Analysts say concerns about Greece and other European union members' ability to deal with swelling budget deficits, combined with lacklustre growth, will weigh on the euro.
The euro has fallen around 1 percent against the dollar so far this week, and some in the market said the pace of its losses may slow in the near term. The dollar rose across the board, boosted by a slide in commodity currencies on reports that some Chinese banks have been instructed to curb lending -- a move that may slow the China's economic recovery.
