ECB cash injection fears see euro fall

The euro hit its lowest point for a decade against the yen today (December 29th) as forex traders considered the prospect of a further cash injection from the European Central Bank (ECB) aimed at preventing a credit crunch in the eurozone.

Europe's single currency fell 0.4 per cent to 100.47 yen this morning after a previous slump to 100.36, its lowest level against the yen since 2001, reports Bloomberg.

The ECB warned yesterday that its balance sheet had climbed to a record high after efforts to ensure liquidity in the region earlier in the month.

Robert Rennie, Sydney-based chief currency strategist at Westpac Banking, told the news provider the common currency is still in a risky position.

"The ECB, for the foreseeable future, will not drain liquidity once per month as it always has done," he added.

Japan's currency advanced against 14 of its 16 counterparts yesterday as traders moved towards safer assets, Bloomberg noted.

Posted by Clive Arniel