The euro fell to a session low against the dollar today and Wall Street stocks fell as reduced hopes of a comprehensive solution to the euro zone's debt crisis and a warning over France's sovereign credit rating prompted investors to keep selling the currency.
The euro was last down 0.5 per cent at $1.36658 on electronic trading platform EBS after going as low as $1.3655.
Strategists said a summit this weekend, which may result in a plan to tackle the euro zone debt crisis, remained key to market sentiment.
US stocks suffered their worst loss in two weeks yesterday, with the S&P 500 falling 1.9 per cent after German finance minister Wolfgang Schauble said it was unrealistic to expect a definitive solution to the euro zone debt crisis at an European Union summit this weekend.
The benchmark Stoxx Europe 600 Index slipped 0.5 per cent to 234.97 at 3.39pm in London
The Iseq was 0.7 per cent lower at 25584.53 shortly before 3pm.
France's CAC 40, down 1.8 per cent, underperformed the broader equity market after Moody's said yesterday it may slap a negative outlook on the country's Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much.
French finance minister Francois Baroin tried to play down Moody's warning saying the country's rating was solid, but investors were unconvinced and focused instead on his comments on GDP growth. He said a growth target for next year would probably have to be revised down.
Investors were given fresh reminders about a weak macroeconomic backdrop in Europe today. German investor sentiment fell to its lowest level in nearly three years in October on uncertainty about the euro zone debt crisis.
However, some analysts played down the significance of the data.
"The 'real' economy is moderating but not collapsing whilst investors' confidence is mainly driven by the unprecedented crisis... (the impact of which) is difficult to predict," strategists at Newedge Group said in a note.
Reuters
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