Shawshank, VA 9/27/2011 (PennyPayDay) – The euro traded lower against the dollar and the yen on Monday, in volatile trading, as doubts over officials reaching an agreement on a resolution for the debt crisis bubbled to the surface. European officials are considering a plan to make sure that Greek default will not spread into the rest of the euro zone’s banking system.
Newspaper reports suggest that officials are mulling a plan that would allow Greece to default, recapitalise banks and increase the European Financial Stability Facility fund way beyond its current €440bn capacity.
However disappointment remained following unfruitful International Monetary Fund and G20 weekend meetings. The euro was at $1.3486, down around 0.1% on Monday. The single currency was also down 0.3% against the yen at 103.02 yen.
The dollar too was lower against the yen, down 0.3% at 76.38 yen. The dollar index, which measures the US dollar against a basket of six other currencies, fell 0.3% at 78.284.
The dollar also lost ground to the pound on Monday however sterling remains susceptible to selling against the dollar on concern that the Bank of England could unleash more monetary easing to bolster sluggish growth.
The greenback has risen by around 6% against the pound over the last month on fears over further QE in the UK, the eurozone debt crisis and the weak US economic outlook.
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