The euro tumbled to a 10-month low against the dollar yesterday after a credit downgrade for Portugal and uncertainty over an aid package for Greece undermined the currency.
Sentiment soured towards the euro after rating agency Fitch downgraded Portugal's credit rating to AA- from AA, citing “significant budgetary underperformance in 2009” and “structural weaknesses” in the country's economy.
The euro was already under pressure on reports that Germany and France had yet to resolve a rescue for Greece and the extent of any involvement by the International Monetary Fund ahead of today's two-day European Union summit.
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