FOREX-Euro slides to five-week low vs dollar; commodity currencies slump

Tue Jul 7, 2015 9:47am EDT
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(Updates prices, adds comment, changes byline, dateline; previous LONDON)

* Euro drops below $1.10, dollar index at one-month high

* Lower German Bund yields also weigh on euro

* Commodity currencies sell off

By Gertrude Chavez-Dreyfuss

NEW YORK, July 7 (Reuters) - The euro dropped to a five-week low against a buoyant U.S. dollar on Tuesday, after the European Central Bank left emergency liquidity aid for Greek banks at current levels but increased the haircuts on the collateral it demands.

That raised concerns Greek banks could soon run out of cash and that Greece's problems will spread to other southern European countries.

German 10-year Bund yields fell to their lowest since early June and interest rate differentials moved against the euro, which fell to a six-week trough against the yen.

"Markets seem to be losing patience and faith in the Athens' debt crisis ending with Greece's banks intact and the country still a member of the euro zone. Still, panic had yet to set in for the markets," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.   Continued...