Euro Drops in Longest Losing Streak Since 2010
By Allison Bennett and Catarina Saraiva
The euro (EUR) fell for a fifth week versus the dollar in its longest losing streak in almost two years on concern Europe’s debt crisis is worsening and as data showed the U.S. labor market is strengthening.
The 17-nation currency slid to a record low against the Australian dollar and traded at the weakest level in more than 11 years versus the yen as demand at bond auctions spurred concern European nations will struggle to sell debt. The pound rose to a 15-month high versus the euro before the European Central Bank meets on Jan. 12. Hungary’s forint tumbled and Fitch Ratings downgraded the country to junk.
“One of the factors driving the market right now is a general lack of demand for European assets,” said Shahab Jalinoos, a senior currency strategist in Stamford, Connecticut, at UBS AG. “There are enough sources of new bad news to keep the market adapting; all the bad news is not priced in yet.”
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Comment: Financial markets operate at various levels. Above the fundamental level resides liquidity and y above liquidity resides talk and opinion. Most of the time all three levels diverge. Taking opportunity of the discrepancies between the three levels are the key to market success.
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