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Euro loses ground against dollar

(Agencies)
Updated: 2008-10-06 15:13

FRANKFURT, Germany -- The euro slid to a 13-month low against the dollar Monday after European leaders came away from a weekend meeting without announcing a bailout plan for the continent's troubled financial sector.

Various world currency notes. The euro hit its lowest point in 13 months against the dollar Thursday on growing speculation eurozone interest rates will be cut soon to offset the impact of unprecedented turmoil on global markets. [Agencies]

The 15-nation euro bought US$1.3606, down from the US$1.3863 it bought in late New York trading Friday. It was last that low in early September 2007.

On Saturday, Europe's four major economic powers -- Germany, France, Britain and Italy -- called for tighter regulation but shied away from advocating a massive bailout like the US$700 billion plan passed Friday in the United States.

But Germany became the latest country to move to allay fears about the financial meltdown by enhancing a rescue plan for Hypo Real Estate AG, Germany's second-biggest commercial property lender, and guaranteeing private bank accounts as European governments scrambled on their own to save failing banks.

German Chancellor Angela Merkel also said Sunday that no citizen should fear for the safety of their investments. Hours later, her government announced a new bailout package totaling euro50 billion (US$69 billion) for Hypo Real Estate.

Hypo said an original euro35 billion (US$48 billion) rescue plan fell apart after private lenders withdrew support, a key element to the proposal that had already been approved by the EU.

In other currencies, the British pound bought US$1.7601 Monday compared with US$1.7680, while the dollar bought 103.28 Japanese yen from 105.16 yen Friday in New York.