Financeroll.com – The euro steadied against the dollar on Monday as a slight recovery in investors' appetite for risk offset worries about the fiscal health of some euro zone countries.
The euro, however, stayed near an eight and half month low versus the greenback and analysts said sentiment toward the single currency remained broadly negative as traders worried about debt troubles in Greece, Portugal and Spain.
Investors were disappointed the weekend Group of Seven meeting did not lead to concrete action to tackle the sovereign debt problems of these countries.
European ministers told their counterparts at the meeting they would ensure Greece sticks to its budget-cutting plan, but analysts said more was needed to restore confidence the problems would not upset the global economic recovery.
In early trading, the euro was up 0.1 percent on the day at $1.3675. It had earlier risen above $1.3700, with traders citing German and east European buyers. It remained less than a cent above an 8-1/2-month low of $1.3585 hit on trading platform EBS on Friday.
The single European currency has shed nearly 10 percent from a 15-month high of $1.5145 hit in late November, as jitters about the fiscal problems in Greece spreading to Portugal and then to Spain intensified.
A Greek public sector union warned of further strikes to fight austerity measures, prompting an increase in the cost of insuring Greece's sovereign debt. Greek government bond yield spreads over German benchmarks also rose.
Against a basket of currencies, the U.S. dollar was down 0.2 percent at 80.268. However, it was not far from a high of 80.683 hit on Friday, its strongest since July 2009.
The dollar was up 0.1 percent at 89.40 yen and the euro also rose 0.1 percent to 122.22 yen. Among perceived higher-risk currencies, the Australian dollar was up 0.1 percent at $0.8680. An announcement at the weekend that an Australian miner signed a deal to sell $60 billion of coal to China over 20 years initially helped sentiment toward the Aussie.
