The euro fell to the lowest in almost two years against the dollar as the nation struggled to rescue its troubled banks, fueling concern the European debt crisis is spreading to the region’s larger economies.
The 17-nation currency slid for a seventh day versus the yen, the longest losing streak in four months, as Spanish bond yields climbed after central bank Governor Miguel Angel Fernandez Ordonez resigned a month early amid criticism over the nationalization of Bankia group. The yen and dollar strengthened as investors sought safer assets before a European report forecast to show economic confidence dropped. The Australian dollar fell after retail sales declined.
“Spanish yields have risen to the extent that the nation can’t raise funds easily, and a further gain in the yields will increase the possibility” the country will need a bailout, said Kengo Suzuki, a foreign-exchange strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest bank by market value. “Even from the perspective of its economic fundamentals, the euro is susceptible to selling.”
The euro declined 0.3 percent to $1.2462 at 8:36 a.m. in London after sliding to $1.2452, the weakest since July 2010. The single currency fell 0.5 percent to 98.88 yen. It dropped to 98.81 yen, the lowest level since Jan. 19. The yen gained 0.2 percent to 79.34 per dollar.
The European currency has depreciated 5.9 percent against the dollar this month, the most since September, and slid 6.5 percent versus the yen.