Currency exchange sees 'vulnerable' euro

The euro is in a vulnerable position on the currency exchange markets as Greece's sovereign debt problems have exposed some weaknesses in the single currency zone.

Around a decade after its launch, the euro was being considered by central banks across the world as an alternative to the dollar for cash reserves.

But the sovereign debt problems experienced in Greece may have put an end to the growing confidence in the currency.

Recently, European countries, led by Germany, were forced to bail out Greece as its fiscal policy looked unlikely to overcome the country's deficit.

Imre Speizer, a market strategist in Wellington at Westpac Banking Corp, commented to Bloomberg: "Poor economic growth prospects and European credit risk concerns are pushing the euro down.

"If the negative sentiment around Greece continues to linger, it poses an ongoing negative for risk appetite."

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Posted by Eleanor Ward