The shared currency of the European Union mildly climbed from its lowest value in 16 weeks against the U.S. dollar on Friday, according to
But, despite the climbs, the embattled monetary unit was barreling toward a third consecutive week of losses as the sovereign debt crisis continued raging among the 17-nation bloc that uses the monetary unit. Wolfgang Schaeuble, finance minister of Germany, said the rough waters caused by the debt crisis are likely to continue for 24 additional months at minimum.
Moody's Investors Service, an international credit rating agency, downgraded the standings of 16 banks in Spain, which very quickly is becoming another flashpoint of concern in the region. Greece's rating also was downgraded by Fitch Ratings, which pointed to the noted performance of political parties and factions earlier this month during inconclusive elections. The service also cited leaders' failure to establish a government in the nation that has received two tranches of bailout aid since June 2010.
"Throughout the week the financials in European countries have been hammered and that has put more pressure on the situation, but it feels a little bit exhausted," head of U.S. currency sales Fabian Eliasson with Mizuho Financial Group in New York told Bloomberg. "You can see that the commodity currencies are down, with both Aussie and the kiwi being sold off. Normally that happens when things are getting more defensive and people are taking risk off the table."
By contrast, the U.S. dollar and the Japanese yen - both considered safe-haven monetary units - were driving toward weekly gains against most of their rival currencies.
The 17-nation monetary unit was heading toward a fourth weekly loss against the yen. As the Group of Eight nations meetings kick off on Friday, European leaders are likely to fall under a harsh scrutiny to keep debt-riddled Greece among the euro zone.
Greece's election earlier this month did not deliver a clear victor and neither did follow-up negotiations among the country's leading political parties. For that reason, voters in the Aegean nation will return to the polls in the middle of next month.
But Angela Merkel, chancellor of Germany, suggested the hobbled nation conduct another voting exercise.
The BBC reports
Merkel said voters in the country should express their opinions as to whether to remain part of the euro zone when it attempts to vote for a new leader again. She issued the suggestion during a conversation with President Karolos Papoulias of Greece, a Greek spokesman said.
The leader of the nation hosting the euro zone's largest economy "conveyed thoughts about a vote parallel to the election with the question to what extent do the Greek citizens wish to remain within the euro zone," according to a statement issued by the interim prime minister of Greece. "However, it is clear that the matter is beyond the competence of the caretaker government."
The elections have been scheduled for June 17.
France, which also conducted national elections on May 6, endorsed Greece remaining among the euro zone. Francois Hollande, a socialist who prevailed in the French election, was in Washington when he endorsed Greece remain.
"We have the same conviction that Greece must remain in the euro zone," Hollande said, according to the BBC.
Thus far this month, the euro has dropped 4 percent against the U.S. dollar, according to
And those losses are likely to continue as both Greece and Spain struggle.
"Even as position squaring dominates ahead of this weekend's summit of G8 leaders, strong undercurrents of risk aversion persist, as a result of which the U.S. dollar remains net bought on balance," managing director of global FX strategy Samarjit Shankar with BNY Mellon in Boston told Reuters.