The euro fell against the dollar early Tuesday, closing in on
the 12-year low hit last month, while also chalking up a fresh near
two-year low against Japan's yen.
In early trade, the single currency traded at $1.0559, down
around 0.3% on the day. Since the start of the year, the euro has
now declined close to 13% against the greenback--a symptom of an
increasingly large rift between monetary policy in the U.S. and
Europe.
While the U.S. Federal Reserve is inching closer to a rate rise,
the European Central Bank has committed to a highly accommodative
program of massive asset purchases until at least September next
year.
Exacerbating the move is uncertainty surrounding Greece and its
future in the currency bloc, Standard Bank currency strategist
Steven Barrow wrote in a note Tuesday.
"Faith in the currency seems to be crumbling," he wrote.
Greece last week met the deadline for repaying part of its loan
from the International Monetary Fund, but the country remains
locked in negotiations with its creditors over its broader bailout
program.
Among its near-term debt burdens, Greece must repay IMF loans of
about EUR770 million on May 12. Maturing treasury bills in the next
two months also create a challenge, as foreign investors are
increasingly unwilling to buy new issuance and Greek banks have
been ordered by the eurozone banking supervisory authority not to
increase their exposure.
In stock markets Tuesday, merger and acquisition activity
continued to drive sentiment.
Shares in French telecommunications equipment maker
Alcatel-Lucent SA soared more than 14% in early trade on news that
Finland's Nokia Oyj is in talks to buy the company.
The past few weeks have seen an upswing in merger and
acquisition activity, supporting shares around the globe. Last
week, Petroleum giant Royal Dutch Shell PLC said it is in advanced
talks to acquire Britain's BG Group PLC in a deal that would likely
be valued at upward of $50 billion.
FedEx Corp. meanwhile, agreed to buy Dutch package-delivery
company TNT Express NV for $4.8 billion.
On Tuesday, the Stoxx Europe 600 index was around 0.1% lower in
early trade, having edged up to new record high on Monday.
Germany's DAC lost 0.3% in early trade, while France's CAC and
London's FTSE both inched slightly less than 0.1% lower.
In commodity markets, Brent crude rose 0.7% to $59.43 per
barrel. Gold was down 0.5% to $1,193.50 per troy ounce.
Write to Josie Cox at josie.cox@wsj.com
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