FOREX-Euro tumbles to 14-month low after ECB stands pat

* Euro struggles broadly, hits 14-month low vs dollar

* Euro off nearly 5 pct vs dollar this week

* Euro hits record low against Swiss franc

* Concern escalates that Greek debt woes may spread
(Adds comments, details, updates prices, changes byline)

By Samantha Pearson and Vivianne Rodrigues

NEW YORK, May 6 (BestGrowthStock) – The euro tumbled to a 14-month
low against the dollar on Thursday after the European Central
Bank offered no new measures to ease a Greek debt crisis, which
investors fear could spread across Europe.

After dropping to $1.2655, the euro was down 1 percent at
$1.2686 (EUR=: ), hovering around its lowest since March 2009.

Confidence in the euro zone has been plummeting as Greece
struggles to introduce cuts to public spending in the face of
violent protests in Athens.

“Nothing short of a sensational announcement can help the
euro at this point. And that certainly did not come from (ECB
President Jean-Claude) Trichet,” said Kathy Lien, a director
for currency research at GFT Forex, in New York.

As expected, the ECB left interest rates at a record low of
1 percent on Thursday. Trichet said the bank had not considered
buying government debt to stop the euro’s rout, as some had
speculated, and that a Greek default was “out of the

Germany’s parliament was due to vote on approving its share
of a 110-billion-euro EU/IMF Greek rescue package on Friday,
but fears of contagion to other heavily indebted euro zone
countries, including Spain and Portugal, persisted, driving a
safe-haven bid for the dollar and U.S. Treasury debt.

“The forex market (Read more about the difference between the forex market and the stock market. ) is concerned about one thing and one
thing only and that is ‘contagion,’ said analyst Dennis
Gartman, from the Gartman Letter.

The euro has slumped almost 5 percent against the dollar
this week and is down more than 11 percent year to date.

Among major currencies, the dollar was only weaker against
the yen in afternoon trading in New York, dropping 2.3 percent
to 91.64 yen (JPY=: ). The Japanese currency also tends to
benefit in times of risk aversion.

The euro, which hit a 15-month low of 116.26 yen earlier,
was on track for its biggest daily loss against the yen since
February. It was last down 3.3 percent at 116.30 yen
(EURJPY=: ).

The euro also hit an all-time low against the Swiss franc
beneath 1.41 francs (EURCHF=: ), shedding 1.7 percent. Traders
said the Swiss National Bank, which has been intervening in the
market in recent months to prevent excessive franc strength,
earlier stopped defending levels above $1.43.

Sterling fell 1.2 percent to $1.4915 (GBP=D4: ) as markets
awaited the outcome of closely-contested British elections.


As Greece struggles to consolidate its budget, fears have
grown over the effect of the crisis on the more vulnerable
members of the euro zone.

“Many expect that Portugal and maybe Spain will follow in
Greece’s footsteps and need a bailout from the European Union,”
said John Doyle, foreign exchange strategist at Tempus
Consulting in Washington.

Investors were hoping for reassurance from the ECB but
analysts said the bank’s latest comments indicated it was more
concerned with recent improvements in the euro zone economy.

The euro earlier trimmed some losses after Spain managed to
sell five-year government debt, albeit at a higher yield than
at its last sale in March, which quelled some market concerns
that Madrid’s credit risks may be rising quickly.

“The auction results suggested a feeling that the
contagion, at least for Spain, may not be that strong,” said
Lutz Karpowitz, currency strategist at Commerzbank in

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(Additional reporting by Wanfeng Zhou and Steven C. Johnson;
Editing by James Dalgleish)

FOREX-Euro tumbles to 14-month low after ECB stands pat