The dollar strengthened against all major currencies except the Japanese yen, taking the dollar index to its highest in nine years. The euro was among the biggest movers, falling as much as 1.2 per cent against the dollar to $1.1864 — its weakest level since March 2006 — before narrowing the decline to $1.1955, a four-and-a-half-year low.
The stronger US currency also nudged oil prices to multi-year lows, with WTI crude dropping 1.3 per cent to $52 a barrel while Brent crude fell 0.7 per cent to $55.74 by mid morning London time.
“We are still in a strong-dollar environment going into this year, but the euro downtrend is leading the way,” said Mitul Kotecha, currency strategist at Barclays.
After dropping to a four-and-a-half year low at the end of last week, the euro’s fall intensified on Monday after a weekend Der Spiegel article citing unnamed sources claimed Berlin was ready for Greece to exit the eurozone if the populist Syriza party won this month’s snap election and reneged on the country’s reform programme.
Chancellor Angela Merkel’s government insisted Germany still assumes “that Greece will continue to meet its obligations”.
Euro falls to nine-year low amid Greece woes
05 January 2015
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The euro briefly sunk to a nine-year low against the dollar on Monday on the back of a disputed report that Germany was prepared to allow Greece to quit the currency bloc and more hints the European Central Bank is preparing to buy government bonds.
