Euro Heads for Fifth Straight Weekly Drop, Selling Pressure Shows Signs of Easing

The euro is on track for a fifth consecutive weekly decline, though the selling streak is losing momentum as France's debt market stabilizes and falling US yields slow the dollar's rally. The common currency hit a 17-month low of $1.1161 on Monday on concerns over France's record debt load and the political difficulty of passing budget cuts. It has since recovered to $1.1211, down 0.3% for the week and more than 3% over five weeks against the dollar. The euro also fell 0.3% versus sterling to near a 16-month low of 84.74 pence. France's far-right candidate Marine Le Pen presented deficit-reduction plans this week, which markets read as reassuring. Macquarie strategists warned that France's bond sell-off and social unrest are operating in a "feedback loop," with intensified riots potentially widening yield spreads. The yen headed for a fourth straight weekly drop, steadied near 158 per dollar. The New Zealand dollar is poised for a seventh consecutive weekly decline, its longest losing streak in over four years.