Euro Falls to 14-Month Low as Credit Crisis Spreads to Europe

Source: Bloomberg.com

Oct. 6 (Bloomberg) -- The euro had its biggest one-day drop against the yen since its debut in 1999 as the deepening credit crisis prompted European governments to pledge bailouts for troubled banks while stopping short of coordinated action.

The 15-nation currency declined to a 14-month low against the dollar and the weakest in 2 1/2 years versus the yen after leaders meeting at the weekend avoided announcing any plan that would mirror the U.S.'s $700 billion bailout. Germany joined with banks and insurers to prevent the collapse of property lender Hypo Real Estate Holding AG and Belgium announced a revised deal to salvage Fortis. The yen jumped 5 percent versus the Australian dollar as investors cut holdings of higher- yielding assets funded in Japan, known as carry trades.

``It appears that European governments are failing to grasp the real problem and are taking reactive measures instead of dealing with the underlying situation,'' said Ian Stannard, a London-based currency strategist for BNP Paribas SA. ``The market is disappointed with the results out of weekend meetings and that's going to put the euro under increasing pressure.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=avC.1.PvSqHg&refer=worldwide

---

Looks like things are going to get worse worldwide. Russia's stock market has fallen more than 50%, between this mess and Georgia.

I bet Cheney was upset to see his losses- he favors Euros...oh, wait. He's a champion insider trader. He probably bailed at the appropriate time.

Maybe someday I'll be able to afford a trip to Europe.

I'm just trying to fit in here. Sorry.