Euro extends losses in early Asian trading

The euro plummeted to close to a 12-year low on the yen and recorded record lows against the Australian dollar on Monday, starting the week pressurised on persistent concerns that Spain will have to eventually request a full sovereign bailout.

Market confidence was so low that Spanish bond yields climbed to their highest mark since the creation of the single currency, even as finance ministers in the euro zone approved loan terms on Friday of up to 100bn euros for Spain to recapitalise its banks.

The common currency bought 95.10 yen, after having dropped to 94.88, a low not experienced since November 2000. Versus the greenback, it fell to a 25-month low of $1.2103, closing in on the 2010 low of $1.1876. Against the Australian dollar, the euro sunk to an all-time low of A$1.1670, meaning losses this month have climbed above five per cent.

Another factor weighing on the euro was that German magazine Der Spiegel on Sunday reported that the International Monetary Fund might not partake in any further refinancing for Greece.

Traders claimed that concerns of slower Chinese growth also added to the gloom, ahead of HSBC manufacturing data being published on Tuesday. Later this week, figures on UK and US GDP are predicted to show softness.