Reuters: Euro Retreats on Worries Over Euro Zone

Posted On: April 16, 2012

From Reuters

NEW YORK, April 16 (Reuters) - The euro hit a two-month low against the yen and a 1-1/2-year trough versus sterling on Monday as a rise in the yield on Spain's government bonds raised fresh concerns about the euro zone economic outlook.     

Spain's 10-year government bond yields rose above 6 percent for the first time this year as investors worried about the country's ablity to contain its budget deficit, and the cost of insuring its debt hit a record high.    

Commodities-linked currencies such as the New Zealand and Australian dollars slipped, while the yen rose to a 1-1/2-month high against the U.S. dollar. Stronger-than-expected U.S. retail sales for March, however, helped the dollar trim some of its losses against the Japanese currency.   

"Already at multimonth lows against the dollar, yen and sterling, the euro would be vulnerable to further losses if Madrid fails to put a halt to the steady erosion in market confidence in its ability to manage its massive load of debt," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

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