Forexpros – The euro turned lower against the other major currencies on Monday, as investors sold the currency to lock in gains following last week’s three-day rally, while uncertainty over the ability of the European Central Bank to implement measures to stem the long running crisis in the euro zone also weighed.
During European late morning trade, the euro was down against the U.S. dollar, with EUR/USD sliding 0.38% to 1.2273.
Italy saw the yield on 10-year bonds fall below 6% for the first time since April at an auction of government debt earlier, indicating that investors now see Italian government debt as a somewhat safer investment.
Italian and Spanish borrowing costs have eased back from highs hit last week after ECB President Mario Draghi pledged Thursday to do whatever is necessary to preserve the single currency.
The remarks fuelled speculation that the ECB is set to announce fresh policy measures to tackle the crisis following its policy meeting on Thursday, but investors remained wary of the possibility that the central bank could disappoint expectations.
Elsewhere, official data showed that Spain’s economy contracted 0.4% in the second quarter, marking the third consecutive quarter of contraction.
The euro was also lower against the yen, with EUR/JPY falling 0.67% to 95.99.
The single currency edged lower against the pound, with EUR/GBP slipping 0.09% to 0.7814 and remained little changed against the Swiss franc, with EUR/CHF dipping 0.01% to 1.2010.
Sentiment on sterling remained fragile after official data showed that U.K. mortgage approvals fell to the lowest level since June 2010 last month, while a separate report showed that net lending grew at the slowest pace in 12 months in July.
The data came after data last week showed that the U.K. economy contracted significantly more-than-expected in the three months to June, extending the U.K. recession into a third quarter.
The shared currency hit fresh record lows against the Australian and New Zealand dollars, with EUR/AUD down 0.49% to 1.1691 and EUR/NZD falling 0.43% to hit 1.5162 and was hovering close to a record low against the Canadian dollar, with EUR/CAD losing 0.32% to trade at 1.2319.
Later Monday, U.S. Treasury Secretary Timothy Geithner was to meet with German Finance Minister Wolfgang Schaeuble and Mario Draghi to discuss the European, U.S. and global economies.
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