The euro saw a bad day against the US dollar for thirdd consecutive day as investors worried that the harsh spending cuts mandated by a bailout plan may choke off a fragile recovery in the 16-country euro zone. Samarjit Shankar, managing director of global FX strategy at BNY Mellon in Boston said: "There is a lot of belt-tightening that lies ahead for euro zone countries. You have a tight fiscal policy and weak monetary policy and that’s a recipe for currency weakness."
Joseph Brusuelas, chief economist at Brusuelas Analytics in Stamford, Connecticut, said "Investors consider more closely coordinated fiscal policy among euro zone countries crucial for the euro’s future. Unless we see those measures taken over the next six months to a year, I think people are going to conclude that European banks have debts on their books that are worth far less than current market values suggest."
The euro was 1.3 percent weaker at $1.2370. The euro fell 1.6 percent to 114.25 yen while the dollar slipped 0.5 percent to 92.22 yen. Pound fell 0.4 percent to $1.4557.