European economic problems see euro dip against the dollar

Published: 14 Nov at 9 AM Tags: Euro, Dollar,

The euro has slumped to its lowest level in a month against the yen and to its lowest level against the dollar in nearly two months as analysts watch to see if Spain will ask for a bailout and concerns linger over whether further aid will be delivered to Greece.

November has seen the euro dip against the dollar by 1.9 per cent and drop against the yen by 1.7 per cent. Although Greece has not yet received more funds from its international lenders, Athens has been given an extension on the time it has to sort out its budget.

Investors are worried that the troubles in Europe are far from over as lenders continue to disagree over whether Greece is doing enough to slash its crippling debt. The euro is currently trading at $1.2704, slightly up from a previous low of $1.2660.

Recession ravaged Spain also continues to be a cause for concern although bond prices have been supported by the assumption that the country will request a bailout imminently.

Finance Minister for Germany, Wolfgang Schaeuble, has indicated that a three-tranche package for Greece worth 44 billion could be put together into a single package. He said if this happens he wants to see control mechanisms put into place, but analysts have taken the news as an indication that Germany is looking to fix the problems in Greece as speedily as possible.