Euro sinks as safe havens rally after Paris attacks



The euro fell against its major peers in Asia Monday as dealers shifted back to safer investments after the deadly weekend terror attacks in Paris reinforced concerns about the impact on the already struggling eurozone economy.

The risk-off mood, also stoked by fresh data showing that Japan’s economy slipped back into recession in the third quarter, weighed especially on the euro as foreign exchange markets opened for the first time since the attacks that killed at least 129 people.

The impact of the violence on the eurozone fuelled a fall in the single currency, which is already under pressure from expectations the European Central Bank will ramp up its stimulus programme to boost growth.

The euro slipped to $1.0720 and 131.31 yen from $1.0764 and 131.99 yen Friday in New York.

The dollar dropped to 122.50 yen from 122.62 yen in US trade. “The euro is under pressure as markets see recent events as destabilising and increase the uncertainty over the European economic outlook,” Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd, told Bloomberg News.

“The yen is currently benefiting from its traditional ‘safe haven’ status.”

Dealers move into assets seen as less risky like the yen in times of uncertainty and turmoil.

Japan’s economy, the world’s number three in size, shrank 0.2 per cent in the July-September quarter, official data showed Monday, marking a second straight quarterly decline, or technical recession.

The dollar rallied against higher-yielding, or riskier, emerging units such as the South Korean won and the Indonesian rupiah. The won fell 0.78 per cent against the greenback, while the rupiah was down 0.44 per cent. The Malaysian ringgit shed 0.34 per cent as the Thai baht and the Singapore dollar also dropped.