RTTNews - The euro saw some weakness against its lower-yielding rivals on Monday in New York as U.S. and European stocks fell sharply after the World Bank reduced its global gross domestic estimate.
The common currency fell to five-day lows against both the dollar and the yen. On the other hand, the euro headed modestly higher after hitting a multi-month low against the British pound.
The World Bank reduced its global GDP estimate as well as the outlook for most other economies and warned of a large decline in international capital flows amidst financial market fragility and recession.
Meanwhile, European Central Bank President Jean-Claude Trichet warned that there are still risks of a sudden emergence of unexpected financial turbulence. He said while there are first signs that the pace of economic weakening is decelerating, policy makers must remain alert.
The euro fell to a five-day low of 1.3826 against the U.S. dollar amid choppy trading. The common currency has been trending lower since briefly topping 1.4000 late last week.
There is no major economic data in the U.S. as traders looked ahead to the Federal Open Market Committee's two-day meeting, which begins tomorrow.
The euro also dropped to a five-day low against the Japanese yen, hitting 132.48. If the European currency slips below 132.34 it will reach a 3 1/2-week low.
The euro rebounded against the sterling after dipping below 0.8400 for the first time this year. The European currency reached 0.8480 in the early afternoon.
The property website Rightmove said today that the asking prices for homes in most of Britain fell in June after four months of rises, but the annual rate of decline moderated to an eight-month low.
In other economic news in the Eurozone, German business sentiment improved to 85.9 in June from a revised reading of 84.3 in May, a monthly survey the Munich-based Ifo Institute for Economic Research showed Monday. Economists had expected the index to rise to 85 in June.
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