Euro lowest in 9 years on eurozone worries, falling oil

AP FILE PHOTO

NEW YORK, United States – The euro sank against the dollar to the lowest level in nearly nine years Monday as investors worried about a possible Greek exit from the eurozone and sliding oil prices.

Fears mounted that an election in embattled Greece later this month could put the opposition anti-austerity party Syriza in power, jeopardizing the country’s economic reforms mandated by the international financial rescue.

Over the weekend, the Der Spiegel weekly quoted German government sources as saying that Berlin sees a Greek exit from the eurozone as “almost inevitable” should the left-wing Syriza party win.

The euro slid to $1.1864, the lowest level since March 2006, before recovering to $1.1933 around 2200 GMT. That compared with $1.2002 late on Friday in New York.

Oil prices continued to drop, with the US benchmark contract briefly falling below $50 a barrel for the first time in more than five years on concerns about ample global supplies and weakening economic growth, particularly in Europe and China.

“Weights on the euro include Europe’s weak recovery, which has lagged far behind the US economy, worries about Greece’s future and whether it would honor the terms of its bailout if an anti-austerity party should win the January 25 poll, and sustained and ongoing optimism in the outlook for the US and its currency,” said Joe Manimbo, senior market analyst at Western Union Business Solution.

The dollar gained 11 percent against a basket of major rival currencies last year.

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