Euro Slows Decline by Weekend, Posts Weekly Losses

The euro weakened against other major currencies this week as the worries about the sovereign-debt crisis reemerged. The shared 16-nation European currency strengthened by the end of the week as the European leaders met to discuss the measures to deal with the problem, but the gains of the euro weren’t enough to offset earlier losses.

The theme of the European debt has gone from news recently, but it returned prominently this week. The credit ratings of Greece and Spain were downgraded, while the yields on Greece’s and Portugal’s bonds jumped to the records. The concerns subsided a little after the European leaders gathered on summit in Brussels yesterday. They agreed to use the â‚¬440 billion rescue fund to buy the nations’ debt.

The euro was falling against other most-traded currencies for the whole week. It strengthened on Friday, when the meeting in Brussels occurred. The noticeable exception was the Japanese yen that rose versus the euro after the earthquake spurred demand for safety. The euro posted losses over the week and still looks vulnerable to the concerns about the debt crisis and the risk aversion sentiment, caused by the situation in Middle East.

EUR/USD opened at 1.3994, reached the weekly low of 1.3752 and closed at 1.3902. EUR/JPY fell from 115.06 to 113.84 this week, while it fell as low as 112.92 on Friday before rebounding somewhat. EUR/CHF opened at 1.2951, reached the weekly high of 1.3039 on Tuesday, fell as low as 1.2826 before closing at 1.2912.

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