Euro weakens against the greenback

The euro weakened against the US dollar by 1.6 cents (1.14%) yesterday, finishing the day at $1.3824.

• In early trading yesterday, the dollar strengthened against the single currency following comments by European Central Bank member Erkki Liikanen, who was quoted as saying that the bank’s current key interest rate of 1% is not necessarily the lowest it could go.
  
• Question marks over the health of the eurozone economy going forward continued to weigh on the single currency yesterday afternoon, although better-than-expected US Existing Home Sales figures trimmed its losses to some extent. This month’s reading of 4.68 million was a significant improvement on the 4.57 million recorded in April, and also ahead of the 4.65 million analysts had been forecasting.
  
• However, investor concern over the state of the eurozone economy weighed heavily on the single currency in late trading yesterday, with it weakening further as a result.
  
• In trading so far today, the single currency has recouped some of the losses it endured yesterday as investors look ahead to some important US figures released later today. Core Durable Goods Orders (MoM) and Unemployment Claims figures are both out at 13.30 BST, whilst at 15.00 BST, New Home Sales figures are set to be released. There are no major announcements due in the eurozone today.