Market News

February 8, 2010

The euro fell for a fourth day against the dollar on speculation widening budget deficits in European nations such as Greece and Portugal will deter investors from buying the region’s assets. European finance ministers said during a weekend meeting they will help ensure Greece tackles its deficit. Governments face a growing dilemma as they seek to strengthen the recovery from last year’s recession at a time when rising sovereign debt burdens are being punished by investors and threaten to constrain future growth.

The pound weakened against the dollar amid deepening concern this year’s U.K. election will end in stalemate. The pound fell as much as 0.7%, the weakest level since May 21, after an ICM Ltd. survey for the Sunday Telegraph newspaper showed the U.K. opposition Conservative party’s lead over Prime Minister Gordon Brown’s Labour party narrowed to nine points, suggesting the election that must be held by June will fail to produce a clear winner.

The Australian and New Zealand dollars fell as concern about mounting budget deficits in Europe prompted investors to sell higher-yielding assets. New Zealand’s currency also weakened after central bank governor Alan Bollard said yesterday the nation’s economy is “still fragile.” Both currencies declined as Group of Seven finance ministers in Iqaluit, Canada, pledged to press ahead with economic stimulus measures amid concern about sovereign risk crises in nations.

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Euro/USD Trend Line