Euro Declines as European Leaders Remain Uncertain on Figure of Bailout Funds

The US dollar gained versus the single currency on Wednesday as the European Union leaders still failed to deliver any dollar figure for the recapitalization funds of the banks.

The euro fell to 1.3911 against the US dollar on Wednesday as compared to 1.3921 on Tuesday’s North American trading session. The dollar index DXY which tracks the greenback’s movement against its major six rival currencies surged to 76.207 on Wednesday as compared to 76.154 on Tuesday’s late trading hours.

Investors were optimistic about the latest European Union meeting which was extensively publicized and was expected to find a solution for the euro zone’s sovereign debt crisis. Senior currency strategist, Elsa Lignos from RBC Capital Markets commented, “The final communique is unlikely to disclose a final haircut for Greek debt holders, but it may suggest a range around 50% to 60%, it would be a positive for the euro and risky assets like stocks if a level is set,” she further added, “Markets will take their cue from the general level of detail in the final communiqué, clearly the more, the better.”

The US dollar also declined to its record low versus eh Japanese Yen. The greenback fell to 76.19 against the Japanese yen on Wednesday as compared to 75.92 on Tuesday’s late hours. The US dollar has declined 6.1 percent versus the yen in this year till now. Most of analysts relate US Federal Reserve’s quantitative easing policy to weakening greenback versus the Japanese Yen.

Currency Strategist from Commerzbank commented, “The pressure on dollar-yen continues as long as the uncertainty about possible risks surrounding the sovereign-debt crisis in the euro zone remains high and speculation on possible QE3 in the U.S. rises.”

The British Pound declined versus the US dollar to 1.5967 on Wednesday as compared to 1.6013 on late Tuesday.

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