Euro plummets below $1.20

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- The euro fell to a fresh four-year low below $1.20 Friday, as investors cast fresh doubts on the European debt crisis and a global recovery after gloomy economic statements out of Hungary and a disappointing U.S. jobs report.

What prices are doing: The euro slipped as much as 1.6% against the dollar to $1.19721, a fresh four-year low for Europe's shared currency. It was the second day in a week that the euro's losses surpassed the four-year low in intra-day trading.

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Meanwhile, the dollar fell 1.27% against the Japanese yen to ¥91.53.

What's moving the market: Hungary's bleak economic outlook is in the spotlight after key officials there said the central European country has a "grave situation" on its hands, a "slim chance of avoiding the Greek situation," and must focus on avoiding "sovereign default."

Hungary joined the European Union in 2004 but does not use the euro currency. That didn't stop the euro from falling after the news, as official comments urging fiscal consolidation in the country sparked fear once again about Europe's debt crisis.

After Hungary set the tone for the day, a disappointing U.S. jobs report further took the feet out from the stock market and accelerated the fall of the euro, said Phil Streible, a senior market strategist with futures broker Lind-Waldock.

Employers added 431,000 jobs in May, 411,000 of which were temporary Census positions, the Labor Department said. Economists were expecting the government to report an increase of 500,000 jobs, according to a survey by Briefing.com.

Negative sentiment about a global economy recovery following both events pushed the dollar higher and the euro lower. The dollar is viewed as a safe-haven investment so it often performs well in times of economic uncertainty. The euro is considered a riskier asset.

What analysts are saying: Traders consider the $1.20 mark a key technical level for the euro.

"It's a pretty big line in the sand, and you don't want to cross it," Streible said. He expects that if the euro were to close the day below $1.20 it would trigger a sell-off into the $1.17 to $1.18 range.

Concerns about economic instability in the euro zone have caused the region's currency to tumble more than 11% against the dollar since March, as risk-averse investors park their money in the U.S. currency. To top of page

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