Euro weaker on credit mess

Euro weaker on credit mess

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The euro weakened Monday as the credit crisis spread to Europe and banks there headed for bailouts while the yen saw gains as investors deserted carry trades amid chaos in the markets.

In Germany, a group including the German government and private banks and insurers mounted a rescue of Hypo Real Estate Holdings (FWB: HRX), the second largest lender on commercial properties in Germany, while BNP Paribas (Euronext: BNP; TYO: 8665) stepped in to take over Belgian units of Fortis (EuronextAMS: FORA; EuronextBRU: FORB; LuxSE: FOR) after a government rescue fell through.

In late morning trade in New York, the euro was worth ¥137.0184 while the US dollar traded at $1.3516 to the shared currency.

The pound was also up in relation to the euro, to 77.8p to the euro, while the shared currency declined in relation to the Swiss franc, to SFr1.5482.

The greenback was lower in relation to the yen, with the yen trading at ¥101.375 to the dollar while the Japanese currency was up to ¥72.7011 to the Australian dollar and to ¥46.938 to the Brazilian real.

The real was down to its lowest level in nearly two years, trading at R$2.162 to the US dollar.

The Canadian dollar, meanwhile, was down on falling oil prices and a decline of 13.5 percent in the number of building permits issued in August, against an expected decline of just 1.5 percent.

At nearly noon in New York, the loonie traded at C$1.1028 to the US dollar.