Euro and Asian Stocks Drop as Debt Jitters Trump U.S. Data

(Reuters) -- The euro sank against the dollar and the yen and Asian stocks stalled Monday, as renewed gloom about the fallout from the European sovereign debt crisis overshadowed signs of vigour in the U.S. economy.

Data on Friday showed that while U.S. employment growth accelerated last month, euro zone retail sales fell and economic sentiment soured at the end of 2011, pointing to recession in the currency bloc.

Worries over Europe intensified with a debt rating downgrade to junk status for Hungary -- a member of the European Union but not part of the euro zone -- and a report in German magazine Der Spiegel that the International Monetary Fund was losing confidence in Greece's ability to clean up its public finances.

"Despite the positive U.S. employment data, investor focus remains largely on Europe, especially after the downgrade of Hungary's credit rating," said Lim Tae-geun, an analyst at Daewoo Securities in Seoul.

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The euro fell to a 16-month low around $1.2670, and dropped as far as an 11-year low at 97.47 yen. The dollar, meanwhile, rose 0.2 percent against a basket of major currencies <.dxy>.

MSCI's broadest index of Asia Pacific shares outside Japan <.miapj0000pus> fell 0.3 percent. The index had finished the first week of 2012 slightly higher, after shedding 18 percent in 2011. Tokyo markets were closed for a holiday.

The upbeat economic data failed to perk up U.S. stocks on Friday, and S&P 500 index futures fell 0.5 percent in Asian trading, pointing to further losses when Wall Street opens later.

U.S. crude oil eased slightly to $101.40, after climbing above $100 a barrel last week as rising tensions between Iran and the West raised fears of supply disruptions.

(Additional reporting by Joonhee Yu; Editing by Sanjeev Miglani)

Source: http://www.ibtimes.com/articles/278462/20120109/euro-stocks-down-as-debt-jitters-trumps-data.htm

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