RTTNews - The euro saw notable weakness against its major rivals on Monday in New York amid signs the Eurozone economy may not see a recovery as soon as hoped. Weaker global stocks have also reduced risk appetite and sent traders towards lower yielding currencies.
U.K. Daily Telegraph reported on its website that Germany's top industrial group has warned that Germany's credit crunch is deepening. Meanwhile, data released Monday morning that Eurozone employment registered a record decline in the first quarter as companies slashed headcount amid recession.
The euro was also hurt against the dollar as Russian Finance Minister Alexei Kudrin said on the sidelines of the Group of 8 finance ministers meeting that the dollar's role as the main reserve currency was unlikely to change in the near future.
The euro dropped to a fresh 3 1/2 week low against the dollar of 1.3768. With the decline, the European currency moved further away from a multi-month high of 1.4338.
The New York Fed said its general business conditions index fell to a negative 9.4 in June from a negative 4.55 in May, with a negative reading indicating a deterioration in conditions. Economists had expected the index to edge down to a negative 5.10.
The common currency slipped to a seven-month low of 0.8463 against the British pound. The euro has been trending sharply lower for about 10 days against its UK rival.
The euro hit a two-week low against the Japanese yen of 134.91. The drop took the common currency off of a 7 1/2 month high of 139.21 from last week.
According to the European Union statistics agency Eurostat, the number of employed persons decreased 0.8% or by 1.22 million in the first three months of the year from the fourth quarter of 2008. This was the largest decline on record. In the fourth quarter, the decrease was only 0.4%.
Compared to the first quarter of 2008, employment dropped 1.2% after remaining stable in the fourth quarter.
Meanwhile, the Ifo said weak global demand for Germany's manufactured goods was the main reason for recession in the country. However, the recession did not indicate lack of competitiveness, the report said.
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