New York: The euro had its biggest weekly loss since December against the dollar as Greece's anti-bailout party gained in the polls and amid a deepening crisis in Spain.

The shared currency fell for a fifth week versus the yen, the longest stretch since October, as German manufacturing shrank and the Bank of Japan refrained from adding stimulus to the economy. Brazil's real was the only winner against the dollar as the central bank sold currency-swap contracts. The dollars of Australia and New Zealand declined as reports showed the Chinese economy is stalling. A report June 1 is forecast to show US employers added more jobs in May than the prior month.

"Uncertainty is high, growth is poor and a Greek exit is a wild card," said Aroop Chatterjee, a currency strategist at Barclays Plc's Barclays Capital unit in New York. "It's unlikely that the euro finds a bottom for a while even in a good state of the world."

The euro declined 2.1 per cent on the week to $1.2517, touching $1.2496, the weakest since July 2010. The 17-nation currency declined 1.2 per cent to 99.75, falling below 100 for the first time since February. The Japanese currency fell 0.8 per cent to 79.68 per dollar.

Net shorts

Hedge funds and other large speculators increased wagers the euro will decline versus the dollar to a record high for a second consecutive week. So-called net shorts increased for a third week, totalling 195,361 in the period ended May 22 compares to 173,869 for the week before, according to the Commodity Futures Trading Commission.

"Risk appetite itself has traced its undulation to the movements in the euro," Ravi Bharadwaj, a market analyst in Washington at Western Union Co's Western Union Business Solutions unit, said May 23.

European leaders announced no new measures to stem the bloc's crisis at a summit in Brussels last week. The gathering took place as Greece prepares to hold new elections on June 17 after an anti-bailout party surged to second place in balloting on May 6. A poll on May 24 had the Syriza party with 27.2 per cent support, boosting speculation that the country may exit the currency bloc.

Worst performance

The euro weakened 1.2 per cent against nine developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes, the worst performance along with the Swiss franc. The dollar gained 1.1 per cent and the yen rose 0.2 per cent.

The shared currency fell below $1.25 for the first time in 22 months after the president of Catalonia, one of 17 semi-autonomous regions in Spain, repeated his call for Spanish central government to help regions access funding, Standard & Poor's cut the credit ratings of five Spanish banks and the Bankia group said it needed €19 billion (Dh87 billion) of government money.

A German index based on a survey of purchasing managers in the manufacturing industry declined to 45 this month from 46.2 in April, Markit Economics said May 24.

"It's unwelcome development with German manufacturing, because typically that's where you go looking for a silver lining in the euro," Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York, said May 24. "The second quarter had delivered a shock to growth expectations globally."

Australian dollar falls to 6-month low

New York : Australia's dollar fell 0.9 per cent to 97.58 US cents. The Aussie fell to 96.90 US cents on Wednesday, a six-month low.

New Zealand's dollar declined 0.3 per cent to 75.40 US cents and touched 74.57 US cents, the weakest since November. The so-called kiwi's losses were limited as Moody's cited the government's deficit and debt trajectories in affirming its AAA rating.

China is Australia's largest trading partner and is the second-biggest destination for New Zealand exports.

American employers added 150,000 jobs in May, according to the median estimate of economists surveyed by Bloomberg News, after a 115,000 gain in April that missed forecasts. The jobless rate held steady at 8.1 per cent, according to another survey.

The Dollar Index rose 1.3 per cent to 82.393, after touching 82.461, the strongest since September 2010. The gauge's fourth consecutive weekly gain comes as cumulative net inflows in to US Treasuries yesterday were more than double the daily average over the past year.

The Swiss franc was the biggest loser against the dollar last week, falling 2.1 per cent to 95.95 centimes per dollar. It was the biggest weekly loss since November 4. Switzerland's currency touched the weakest level in two months versus the euro on Thursday amid speculation the central bank may take action to discourage investment in the nation through taxing deposits.