TOKYO, May 17, 2010 (AFP) – The euro slid to its lowest level since October 2008 in volatile Tokyo trade Monday as persistent fears over eurozone debt continued to pressure the single currency. The euro fell to as low as 1.2332 dollars in Tokyo trade from 1.2358 in New York Friday, before recovering to 1.2353.
“Concerns that severe fiscal austerity in the eurozone will crush growth in the region continues to weigh” on the euro, said John Kyriakopoulos of National Australia Bank in Sydney.
The EU and IMF agreed a package worth almost one trillion dollars designed to prevent the Greek crisis from spreading to other weak eurozone economies.
But the move has failed to reassure markets, with stocks and the euro continuing to tumble, prompting Spain, Portugal, Italy, and France to announce belt-tightening measures.
Athens is paying a painful price for its past overspending with the government forced to slash civil servant pay and pensions while raising taxes as a condition for a 110-billion-euro EU-IMF bailout.
The IMF and EU agreed the Greek bailout package only at the beginning of May and a week later were forced to put together the trillion-dollar euro rescue plan as investors continued to dump the currency and European shares.
The euro was trading at 113.72 yen from 116.67 yen Friday. The safe-haven yen was higher at 92.10 to the dollar from 92.47.