The euro fell the most in a month against the dollar as Italian and Spanish bonds slumped amid political turmoil, damping demand for the shared currency.
The 17-nation currency dropped versus all but one of its 16 major peers as Spanish Prime Minister Mariano Rajoy faced calls to resign after newspaper reports alleged he accepted illegal cash payments. A poll showed former Italy Premier Silvio Berlusconi closed the gap on front-runner Pier Luigi Bersani even as he appeals a four-year prison sentence for tax fraud. The yen weakened beyond 93 per dollar for the first time since May 2010. European Central Bank policy makers meet this week.
“The euro obviously has come off quite sharply,” Fabian Eliasson, vice president of corporate foreign-exchange sales at Mizuho Financial Group Inc. (8411) in New York, said in a telephone interview. “I would attribute that to some negative headlines out of Europe. Obviously, things can’t go up forever.”
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