Euro drops to new two-month low

The euro has plunged to a new two-month low against the US dollar as a recent bailout plan for Ireland has failed to ease market concerns about the eurozone’s economic health.

The European currency has slipped to 1.3181 US dollars in Tokyo, its lowest level since September, compared with 1.3247 in US markets Friday afternoon, AFP reported on Monday.

The drop comes amid fears of a growing debt crisis among eurozone countries.

The European Union approved an 85 billion euro rescue package for Ireland on Sunday and outlined a permanent system to resolve Europe’s debt crisis, in which investors could gradually share the cost of any future default.

There are fears that Spain and Portugal could be the next two nations in line to ask for an international bailout.

Auckland-based HiFX (Foreign Exchange Specialists) senior trader Stuart Ive said late Sunday that while the Irish package may “stabilize things a little bit, at the end of the day, markets are still very, very interested in what’s happening with Portugal and Spain, as well,” Dow Jones Newswires reported.

“Whilst Ireland and Irish banks may have settled down, there are still concerns surrounding those other two nations,” referring to the market contagion engulfing Spain and Portugal.

The unemployment rate in both countries, which suffer from high levels of debt, now stands at 20 percent.

Earlier this year, the euro fell to levels not seen in years against the US dollar.