Euro drops, Finland and Oil

Monday, 18 April 2011 11:52

The euro hit a 10-day low against the dollar on concerns about Greek restructuring and the Portuguese bailout. It fell to $1.4319 as focus is turning towards the Greek situation as it would be the first restructuring and the market has no idea when or whether it will happen.

Finnish voters handed the anti-euro True Finns party a crucial role in parliament and possibly a path into government, as Finland's parliament has the right to vote on European Union requests for bailout funds. Therefore it could hold up plans regarding Portugal and stability to debt markets. On bond markets, Portuguese, Spanish and other lower rated euroland govt debt came under pressure.

Brent has retreated from a 32-month peak of $127.02 hit earlier this month. The conflict in Libya escalated over the weekend after reports of Muammar Gaddafi's forces using cluster bombs.

The oil market is still seeking a replacement for very high quality Libyan sweet crude oil lost due to the conflict, OPEC said on Monday after refiners have shown little appetite for a replacement blend offered by Saudi Arabia to plug the gap.