YEREVAN, May 23, /ARKA/. The ongoing Greek crisis pushed the euro Wednesday to its weakest levels against the dollar since August 2010. The single currency fell to as low as $1.2615 against the dollar in mid-morning European trading before recovering to trade around $1.2650. It also lost ground against the yen while other risky bets such as the Australian dollar also struggled, according to news reports.
The selloff began late Tuesday after former Greek prime minister Lucas Papademos told Dow Jones Newswires that the risk of a Greek exit is “real.” A later attempt by Papademos to clarify his remarks did little to dispel rising tensions or help the euro rebound.
“The environment is now right for the euro to find its natural lower level. It has been supported of late by, among other things, buying support through diversification by the Middle East and China.
But now, with the oil price lower and Chinese growth slowing, the currency is more able to fall, and on the margins, that’s a good thing for the euro-zone economy,” said Simon Derrick, senior currency strategist at BNY Mellon in London. -0-
