The 17-nations shared currency was trading on an upbeat note earlier as the German Chancellor Angela Merkel and French President Nicolas Sarkozy showed interest for an overhaul of European Union treaties so that tougher fiscal rules can be implemented on European Union member nations. Later on the news that Standard & Poor’s rating agency could reduce its AAA rating to AA+ for Germany, France, Austria, Finland, the Netherlands and Luxembourg, in case if the reviewers are not satisfied with actions of the European Union.
Senior currency strategist, David Watt from RBC Capital Markets commented, “Market sentiment was buoyant into the North American session and remained so until late in the session when the stability of credit ratings not only in the EU periphery, but also among the core euro zone nations came into question.”
The euro fell to 1.3386 against the US dollar on Monday as compared to 1.3409 on Friday’s late trading hours. The dollar index DXY which measures the US dollar’s performance against its six major rival currencies gained to 78.654 on Monday as compared to 78.609 on Friday’s North American trading session.
The British Pound however gained versus the greenback to 1.5637 on Monday as compared to 1.5596 on late Friday. The Pound Sterling strengthened on the rise of UK’s dominant service sector index. Against the Japanese Yen, the greenback fell to 77.80 as compared to 78.03 on Friday’s late trading hours.
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