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Euro plunge raises reserve status fears

Peter Garnham
Financial Times [1]
May 6, 2010

The euro fell to a 14-month low on the dollar and one-year low on the yen, raising concerns over the currency’s reserve status.

The pressure on the euro came as investors continued to fret over the fiscal position of Greece and other countries on the periphery of the eurozone and as protests in Athens against austerity measures designed to rein in the country’s deficit turned violent.

Yield on 10-year Greek debt reached a new high, and the price of insurance on Portuguese and Spanish debts also set records. Ratings agency Moody’s warned Lisbon’s credit rating could be cut further.

The euro dropped to a low of $1.2804 against the dollar, its weakest level since March 2009, and held below $1.29 throughout the day, trading at 1.4 per cent lower at $1.2823 in late New York trade.

Full article here [1]