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Euro Extends Slide On Renewed Debt Worries

In early European trading on Monday, the euro has been extending its Asian session's decline against other major currencies as worries over sovereign debt problems in the eurozone grew after Moody's Investors Service lowered its ratings on five Irish banks.

A statement from Greek Finance Minister George Papaconstantinou that the country isn't discussing a debt restructuring also weighed on the European currency. Compounding the euro's woes are rumors that Eurozone member, Finland, may refuse supporting bailouts.

The rating action reflected the reduction in the level of systemic support embedded in the deposit ratings following the downgrade of the sovereign rating, Moody's said in a statement.

The long-term bank deposit ratings of Allied Irish Banks (Allied Irish), Bank of Ireland (BoI), EBS Building Society (EBS) and Irish Life & Permanent (IL&P) was lowered by two notches, while that of ICS Building Society (ICS) was cut by one notch.

Meanwhile, the unguaranteed senior unsecured debt ratings of Allied Irish, EBS and IL&P was downgraded by one notch to Ba3 and that of Bank of Ireland to Ba2.

The outlook on the long-term bank deposit and unguaranteed senior unsecured debt ratings of these institutions is negative, the agency said.

Last week, Moody's has downgraded Ireland's sovereign ratings by two notches, citing weakening financial position of the government amid subdued economic activity. The outlook on the ratings remains negative.

The euro fell to a 16-day low of 1.3584 against the Australian dollar in early European deals. The next downside target level for the euro is seen at 1.340. The euro-aussie pair was quoted at 1.3661 at Friday's close.

The euro that closed last week's trading at 1.3859 against the Canadian dollar slipped to a 1-week low of 1.3788 in early European deals. On the downside, 1.368 is seen as the next target level for the European currency.

During early European deals, the euro dropped to a 17-day low of 118.62 against the yen and a 10-day low of 1.4300 against the US dollar, compared to Friday's close of 1.4429 and 119.88, respectively. If the euro weakens further, it may likely target 1.425 against the dollar and 116.0 against the yen.

Against the Swiss franc, the euro declined to near a 4-week low of 1.2819 in early European deals. The next downside target level for the euro is seen at 1.275. The euro-franc pair closed Friday's trading at 1.2884.

The euro edged down to a 1-week low of 0.8803 against the pound in the early European session. On the downside, 0.875 is seen as the next target level for the euro. At last week's close, the euro-pound pair was worth 0.8854.

Looking ahead, the European Commission is expected to release preliminary results of Eurozone consumer confidence survey for April at 10:00 am ET.

At the same time, the U.S. NAHB housing market index for April is due.

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