New York : The euro dropped for a fifth month versus the dollar in the longest stretch of losses since November 2008 as Europe's deficit crisis spread and officials negotiated a potential $159 billion rescue for Greece.
The dollar rose on Friday to a three-week high versus the yen after the Federal Reserve said the labour market is "beginning to improve" before this week's payrolls report. The franc was the only currency to drop in April versus the euro among its most-traded counterparts as the Swiss National Bank cited measures to limit appreciation.
"We're underweight the euro," said Jonathan Lewis, founding principal of New York-based Samson Capital Advisors LLC, which manages more than $4 billion. "If past is prologue, markets won't be satisfied with the aid package. Even if it looks impressive, the market will focus on the next country that might need aid."
The euro fell 1.6 per cent to $1.3294 on Friday, from $1.3510 on March 31. The euro dropped 1.2 per cent to 124.78 yen, from 126.27. The dollar rose 0.4 per cent to 93.85 yen, from 93.47, after reaching 94.58 on Friday, the highest level since April 5.
The 16-nation euro touched $1.3115 on April 28, the lowest level since April 2009, when Spain's credit rating was reduced to AA from AA+ with a negative outlook by Standard & Poor's, a sign the debt crisis is spreading. It fell below $1.32 the previous day for the first time in a year after S&P cut Greece's credit rating to junk and lowered Portugal's to the third-lowest investment grade.
Outlook for aid
European Commission President Jose Barroso said on Friday at a briefing in Beijing that he's confident a rescue package for the Greek government led by the European Union and the International Monetary Fund will be completed in days.
Polls show a majority of Germans oppose helping Greece before a regional election on May 9 in North Rhine-Westphalia, Germany's most populous state.
Greece's Prime Minister George Papandreou said the nation's survival was at stake in talks to win a bailout including budget cuts denounced by unions as "savage."
