LONDON (CNNfn) - The euro traded just above its latest record low against the dollar Wednesday afternoon, but still far below the level it hit before central banks intervened last month in its support, as traders saw little hope that the Group of 20 nations meeting in Canada would help prop up the fledgling currency.|
Dealers said speculation that Japanese investors were selling loss-making holdings of euros helped to undermine the European currency. The euro fetched 83.07 U.S. cents, below its level of 83.56 in late trading in New York on Tuesday. The single currency earlier fell to 82.90 U.S. cents, down 29 percent from its value at launch in Jan. 1999.
Against the Japanese yen, the euro dropped to ¥89.70, within half a yen of its record low.
"People are clutching at straws if they think that the G20 will offer some kind of supportive comment for the euro," Steve Barrow, a currency economist at Bear Stearns, told CNNfn.com.
"There are other countries at the G20 that are aggrieved at the weakness of their currency against the dollar - Australia for one."
"Everyone is looking towards (U.S. Treasury Secretary) Larry Summers from the U.S. to tone down his comments on the dollar. His comments at the G20 are crucial if central banks are to intervene again to prop up the euro."
Summers yesterday reiterated that a strong dollar was in the best interests of the U.S.
The euro was far below the low of 84.37 cents touched before the ECB led central banks from the Group of Seven nations in a concerted intervention to buy euros in the currency markets on Sept. 22.
The currency has struggled anew since ECB president Wim Duisenberg indicated that he wouldn't recommend a new round of international central bank support for the currency. His comments came in an interview published in The Times of London Oct. 16, which attracted a barrage of criticism from currency market participants because it appeared to expose the currency to further sell-offs.
Other factors depressing the currency included a large order by a European bank to sell the European common currency. "There is speculation in the market that a Dutch company is selling euros," Barrow said.
Members of the G20 are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, U.K., U.S. and the European Union.
--from staff and wire reports