The European Single currency,euro, on Wednesday, May 23, slumped by 0.62 percent against the greenback to $1.1705, its weakest since mid November.
The euro was also hurt by worries that an incoming coalition Italian government comprised of the two anti-establishment parties – the League and 5-Star – looks likely to implement big-spending policies that could add to the country’s large debt and lead to Rome clashing with the European Union.
Euro zone economic growth slowed much more sharply than expected this month, a business survey showed, boosting concerns that there will be no return to the bloc’s recent boom times, Reuters reports.
“There are some concerns of economic growth sort of moderating,” said Peter Ng, senior FX trader at Silicon Valley Bank in Santa Clara, California.
The slowdown casts a shadow over the timing of the European Central Bank’s rate hike, he said.
“Although ending the quantitative easing program was expected for September, if these growth concerns continue, there is probability they could extend that to December,” said Ng.
Traders were also concerned about Turkey, with the country seemingly headed for a full-blown economic crisis as the Turkish lira TRY=D3 plunged to record lows.
