A skeptical remark by the leader of the largest euro zone economy pulled down the value of the common currency of the European Union on Wednesday, Bloomberg reports.
Angela Merkel, chancellor of Germany, said the "European project" is in peril and said policy makers should exert stronger efforts to control the sovereign debt scourge. The debt crisis has been attacking banks, markets and public finance systems in the euro zone for nearly three years.
"We might see a continuation of this euro bounce in the near term given increasingly stretched short positioning on some crosses, but we suspect that continued signs of economic malaise in Europe and stress in European fixed income markets will keep the single currency under pressure over the medium term," states a note penned by strategist Andrew Cox with Citi, according to Reuters.
The Dollar Index, a gauge of the U.S. dollar's value against six competing currencies, increased 0.3 percent.
Losses to the euro were capped by the Tuesday testimony of Ben Bernanke, chair of the U.S. Federal Reserve, who said strategies of spurring economic growth are readily available. The second day of his testimony is scheduled for Wednesday.
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