Oct. 4 (Bloomberg) -- The euro touched the lowest level in more than a decade against the yen amid fading optimism that European policy makers will resolve the region’s debt crisis.
The 17-nation currency reached an eight-month low versus the dollar after European governments signaled bondholders may have to take bigger losses on Greek sovereign debt. The euro pared declines as its 14-day relative strength index versus the dollar and the yen were both below the 30-level that some traders see as signaling an asset’s price has fallen too rapidly and may be poised for a rebound.
“There isn’t much progress in containing the sovereign problem,” said Kengo Suzuki, manager of the foreign-bond department in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest listed bank. “That’s negative for the euro.”
The euro was little changed at 100.98 yen at 8:42 a.m. in London from 100.97 yen in New York yesterday after dropping to as low as 100.76, the least since June 2001. The common European currency traded at $1.3181 from $1.3176 after touching $1.3164, the weakest since Jan. 13.
European finance ministers meeting in Luxembourg considered “technical revisions” to a July deal for Greece that foresaw investors contributing 50 billion euros ($66 billion) to a 159 billion-euro rescue. That “private sector involvement” includes debt swaps and rollovers.
--Editors: Matthew Brown, Mark McCord
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