Euro sinks to new low against dollar

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Euro sinks to new low against dollar

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The euro has plunged to another four-year low against the dollar as Germany’s ban on naked short selling spooks markets.

The single currency stood at 1.214 dollars at midday CET.

Unlike ordinary short selling, naked short selling involves the sale of shares without borrowing them first. Critics say it allows speculators to drive down equity prices.

Investors retort that overregulation dents confidence at a crucial time when countries are seeking to raise funds.

German Chancelllor Angela Merkel told lawmakers in Berlin that she would do whatever it takes to protect the euro.

“If the euro fails, Europe fails too,” she said. “We have to do everything to avert this danger. Then the euro and Europe will be stronger than ever before.”

But markets appear lukewarm to that rallying cry as the euro slides below 1.22 for the first time since April 2006.

It has also hit some of Germany’s financial institutions with Deutsche Bank’s share price falling by 0.7 per cent in morning trading.