Euro Drifts Toward 4-Month Low Below 1.29

The euro weakened toward the lowest in almost four months against the dollar after the Cypriot parliament voted down a bank-deposit levy needed to secure a bailout, risking renewed tumult in the currency bloc.

The 17-nation currency fell for a fourth day versus the yen as an official familiar with the matter said European policy makers in Cyprus discussed further capital controls and extending a bank holiday through to the end of the week. The yen and dollar rose against most major peers as investors sought havens on concern Europe’s crisis may worsen. New Zealand’s currency held declines after Finance Minister Bill English said a drought may reduce pressure on interest rates.

“It’s an impasse with the Cyprus parliament rejecting the proposals from the eurogroup, and they will have to engage in further negotiations,” said Hans Kunnen, the Sydney-based chief economist at St. George Bank Ltd. “This just adds to the weight against the euro.”


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