FX round-up: Euro walloped by Catalonia plea

Date: Monday 28 May 2012

The dollar raced to its highest level since 2010 on Friday as fears about Greece's possible exit from the Eurozone continued to rattle markets.

The euro fell to a two year low against the dollar of around $1.2514, off from $1.2539 the previous session.

The single currency was also dogged by fears that other debt ridden countries in the euro bloc may also leave after Catalonia, Spain's richest autonomous region, asked for help from the central government to pay its bills. Following the announcement Spain's IBEX stock market fell 1.1%.

Meanwhile uncertainty about Greece continues as the nation hits the poll stations again on June 17. Recent polls show a close race between parties for and against the austerity measures.

Over the week the euro was down nearly 2% and is down as much as 5.5% for May so far.

The dollar index, which measures the US currency against a basket of six others, continued momentum to climb to 82.416 versus 82.342 late Thursday. US markets are closed on Monday for Memorial Day.

Sterling nudged higher on Friday after Catalonia's plea for central government financing help. The euro fell to an intra-day low of 79.80p before later paring losses to trade at 79.93p.

Catalonia, represents about one fifth of the Spanish economy, and has over €13bn in debt to refinance this year.



CJ

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