Euro sinks to 22-month low on fears about Europe

AP News
Posted: May 23, 2012 3:38 PM
Euro sinks to 22-month low on fears about Europe

The euro plunged to its lowest level in nearly two years Wednesday as investors fretted that European leaders won't be able to prevent Greece from making a messy exit from the region's shared currency.

The euro fell to $1.2573 late Wednesday from $1.2720 late Tuesday. It fell as low as $1.2544, the lowest since July 6, 2010. The euro has come down sharply against the dollar since last August, when it was worth $1.45.

European leaders were meeting Wednesday to find a way to keep Europe's debt crisis from spiraling out of control. They haven't announced any concrete plans.

The likelihood of Greece leaving the euro has been growing since early May, when parties opposed to the terms of the country's financial rescue won at the polls. New elections are planned for next month.

Spain's prime minister warned on Wednesday that his country couldn't continue much longer with its current high borrowing rates. Spain's 10-year bond yield is currently above 6 percent. Rising borrowing costs eventually forced fellow eurozone nations Greece, Ireland and Portugal to seek bailouts.

But Spain, Europe's fifth-largest economy, may have too much debt for the region's bailout funds.

In other trading Wednesday, the British pound fell to $1.5689 from $1.5777 late Tuesday. The dollar rose to 0.9552 Swiss franc from 0.9443 Swiss franc and to 1.0251 Canadian dollar from 1.0201 Canadian dollar.

The dollar fell to 79.47 Japanese yen from 80.14 yen.