NEW YORK: The euro fell to a nearly nine-month low against the dollar on Friday as questions remained about a rescue deal for debt-stricken Greece and China unexpectedly raised bank reserve levels.
The euro headed for its fifth weekly drop versus the safe-haven greenback as a lack of details in Thursday’s pledge by the European Union to help Athens kept alive fears of a wider euro zone debt crisis.
That sparked a widening in peripheral euro zone government bond yield spreads against German benchmarks and broader concerns trouble in the currency bloc could hurt global economic recovery.
Investor appetite for stocks and higher-yielding currencies like the Australian dollar was further dampened after China raised the level of bank reserves for the second time this year. The move stoked worries aggressive monetary tightening by China may also slow global recovery.
In midday New York trading, the euro was down 0.4 percent at $1.3625, after dropping to $1.3533, its weakest since May 2009, according to Reuters data.
The euro’s losses pushed the dollar to 80.748 against a currency basket, its highest since July 2009. The ICE Futures’ dollar index was last at 80.315, up 0.4 percent.
Concern over how Athens will service its debt has hammered the euro — it has fallen nearly 10 percent since late 2009.
Falling risk appetite also hit demand for higher-yielding currencies, with the Australian dollar down 0.8 percent and the New Zealand currency off 1 percent against the greenback.
The single European currency also struck a decade low against the Australian dollar at A$1.5275.
The euro jumped to a session high versus the Swiss franc in late morning trade with traders citing activity by the Swiss National Bank. The Swiss central bank declined to comment on the currency moves.
The euro rose as high as 1.4701 francs, according to Reuters data, and was last trading at $1.4669, up 0.1 percent on the day. The dollar also gained versus the Swiss franc and last traded at 1.0764, up 0.5 percent.
Meanwhile, world stocks slumped on Friday. The Dow Jones Industrial Average at midday fell 44.44 points, or 0.44 percent, to 10,099.75. The Standard & Poor’s 500 Index declined 2.77 points, or 0.26 percent, to 1,075.70 and the Nasdaq Composite Index rose 0.12 percent to 2,180.01.
In Europe, the FTSEurofirst 300 closed down 0.27 percent at 987.86 points.
Signs that European leaders would support Greece encouraged bargain-hunting in Asia, and Japan’s Nikkei rose 1.3 percent.
Spot gold prices fell $4.00, or 0.37 percent, to $1090.90 and the Reuters/Jefferies CRB Index dropped 0.86 percent.
Oil fell more than 2 percent on Friday after China unexpectedly lifted bank reserve requirements in a move that could slow its demand for commodities imports, and as data showed US oil stocks rose more than expected last week.
US crude for March delivery fell $1.33 to $73.95 a barrel by 12:21 p.m. EST (1721 GMT), snapping a four-day rally. Prices fell as low as $72.66 during the session.
Brent crude for the new front month of April fell $1.37 to $72.75.
US crude stocks rose by 2.4 million barrels last week, the Energy Information Administration said, exceeding forecasts for an increase of 1.5 million barrels. Gasoline stocks also rose more than forecast.