Euro soft as investors bid up safe havens on Turkish crisis

Monday,   13-Aug-2018   09:06 AM (IST)

The euro was on the defensive on Monday after touching a 13-month low against the dollar as investors bid up safe havens such as the U.S. dollar and the yen on worries about the exposure of European banks to crisis-hit Turkey.After hitting a record low of 7.24 against the dollar early on Monday, Turkey's lira found some support after Finance Minister Berat Albayrak said the government has drafted an economic action plan to ease investor concerns and the banking watchdog said it limited swap transactions.The South African rand and Mexican peso were also weak against the U.S. dollar on Monday as the lira crisis unsettled other emerging market currencies.The euro has been hit hard after the Financial Times reported on Friday, citing two sources, that the European Central Bank had concerns about banks in Spain, Italy and France and their exposure to Turkey.On Monday, the euro dropped as low as $1.1368, falling to its lowest level against the dollar since July last year. It last traded down 0.27 percent at $1.13775.The common currency also slipped against the safe haven Swiss franc and yen.The euro briefly fell to a one-year low of 1.1302 francs against the Swiss franc. It traded at 1.1304 francs, down almost half a percent from late last week.The euro was off almost one percent against the Japanese yen, trading at 125.34 yen per euro, close to a 10-week low of 125.26.The lira last traded at 6.99 against the dollar, after sinking to a record low of 7.24 in early trade on Monday.The currency has fallen about 45 percent against the greenback this year on worries over Turkish President Tayyip Erdogan's increasing control over the economy and a deepening diplomatic rift with the United States.The rand plummeted to as low as 15.70 rand per dollar , its lowest levels since June 2016 and down more than 10 percent from late last week, before pulling back slightly.The rand last traded more than 6.5 percent lower at 15.035 rand per dollar while Mexico's peso shed about two percent to 19.30 per dollar.The yen strengthened about 0.7 percent against the dollar to a six-week high of 110.15 yen as investors continued to bid up safe-haven assets.The Australian dollar was down 0.3 percent at $0.72700 , close to a 19-month low of $0.72505 hit early in the session.