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Euro drops under $1.23
 
 
  
 
 AFP - Thursday, June 17
 
 
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 Euro drops under $1.23
 
 
 
 
 
 
LONDON (AFP) - – The euro fell under 1.23 dollars in European trade on Wednesday after its recent pull-back from a four-year low point.
 
The European single currency dropped to 1.2294 dollars from 1.2327 dollars in New York late on Tuesday.
 
Against the Japanese unit, the dollar rose to 91.64 yen from 91.44 yen.
 
The euro had plunged to a four-year dollar low last week on the back of heightened concerns about the eurozone debt and deficit crisis, sinking below 1.19, but recovered in recent days.
 
Sentiment had improved after the European Union reported eurozone industrial production grew 0.8 percent in April and was up 9.5 percent compared with a year earlier.
 
"The market has digested almost all the risky factors for now. But it is still far from when players can feel optimistic about the eurozone," said Hideaki Inoue, foreign exchange analyst at Mitsubishi UFJ and Banking Corp.
 
Markets are still carefully watching Spain for the next potential crisis as doubts grow over the strength of its banking sector, with investors unsettled by the spread of Greece's debt problems throughout the region.
 
The markets shrugged off a cut in sovereign rating for Greece by international ratings agency Moody's on Monday as EU and IMF auditors began taking a hard look at the country's attempts to slash its debt.
 
Analysts at Brown Brothers Harriman believe the euro rally was only a correction following its plunge last week.
 
"Given that the root problem of insolvency remains in place for several eurozone countries, we continue to view this euro rally as a corrective move before the next move down," the analysts said in a note to clients.
 
Traders meanwhile digested official data that showed twelve-month inflation rose to 1.6 percent in May across the 16 countries which share the euro currency, up from 1.5 percent in April.
 
The figures published on Wednesday by the European Union's Eurostat data agency showed that inflation in the common currency area is at its highest since December 2008.
 
Eurozone inflation has risen, almost continuously, from 0.5 percent last November as the bloc emerges from the worst recession since the 1930s.
 
For the 27-nation European Union as a whole May's inflation rate was unchanged at 2.0 percent.
 
In trading here on Wednesday, the euro was at 1.2294 dollars against 1.2327 dollars on Tuesday, at 112.66 yen (112.72), 0.8302 pounds (0.8327) and 1.3906 Swiss francs (1.3969).
 
The dollar stood at 91.64 yen (91.44) and 1.1266 Swiss francs (1.1330).
 
The pound was at 1.4808 dollars (1.4797).
 
On the London Bullion Market, the price of gold rose to 1,236.13 dollars an ounce from 1,225 dollars an ounce on Tuesday.
 
 
 
 
   
 
 
 
 
 
 
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