Euro falls against dollar as US worries rise

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TOKYO: The euro fell further against the dollar in Asia on Monday as risk appetite was eroded by worries over a recession in the world's biggest economy.

The euro dropped to $1.4164 in Tokyo trade from $1.4203 in New York late Friday. The European common unit also eased to 108.77 yen from 109.09 yen.

The greenback was at 0.7897 Swiss francs compared with 0.7885. It fell to 76.75 against the yen, from 76.82.

The euro fetched 1.1192 against the Swiss franc, from 1.1210 late Friday in New York.

The euro remained weak as investors moved to shun riskier assets, taking a cue from sell-offs in Asian stock markets following dismal US jobs data, dealers said.

Official data released Friday showed the struggling US economy added no jobs in August after 10 months of gains amid rising fears of recession while the unemployment rate remained unchanged at 9.1 percent from July.

The worst jobs data since September 2010 sent US stocks plummeting Friday.

"This (US jobs report) is likely to bring further calls for quantitative easing, despite the Federal Reserve's apparent aversion," Michael McCarthy, chief market strategist at CMC Markets in Sydney, told.

There's "significant amount of opposition to any further quantitative easing," said Wellington-based ANZ bank economists in a note to clients. "Those still looking for silver bullets are out of luck."

The euro took the brunt of selling on Friday after the EU and IMF left a critical audit of Greek finances unfinished saying more budget work was needed, and the government admitted its deficit target was in trouble.

Finance Minister Evangelos Venizelos conceded that Greece would have to revise its public deficit target for this year, a key condition for continued funding from the 110-billion-euro ($158-billion) EU-IMF-ECB bailout loan agreed last year.

Also negative for the euro was news that German Chancellor Angela Merkel's Christian Democrats (CDU) suffered an election defeat in her home state Sunday, with the news unsettling the market, dealers said.

On top of renewed concern over the Greek debt crisis, diminishing expectations for further ECB rate hikes are also weighing on the euro, said Daisaku Ueno, chief analyst at Gaitame.Com Research Institute.

The European Central Bank will hold a policy-setting meeting on Thursday. (AFP)

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