Traders work on the floor of the New York Stock Exchange (NYSE) September 12, 2011.
Credit: Reuters/Brendan McDermid
LONDON |
(Reuters) - The euro edged down from two-week highs and shares weakened on Monday as political developments in France and the Netherlands raised fears about the region's commitment to tackle its ongoing debt crisis.
The single currency stood at $1.3189, down from Friday's peak of $1.3225 after French President Nicolas Sarkozy came second to Socialist challenger Francois Hollande in the first round of the presidential elections, and a budget crisis erupted in the Netherlands that could bring down the government.
"The Netherlands could be a problem because up until now it was a stable partner in the euro zone. This shows the problems and increasing tensions within the area," said Christian Stocker, strategist at UniCredit Global Research.
The news sent German government bond yields to record lows of 1.591 percent and increased the premium investors demand to buy French and Dutch bonds.
Europe's top shares opened lower on Monday on the political concerns, but attention was expected to switch to the economy, with euro zone manufacturing activity indicators due out later after data from China showed some signs of recovery in factory output but not enough to prevent the sector contracting.
The FTSEurofirst 300 was down 10.19 points, or 1 percent, at 1035.89, having posted its best week in a month on Friday.
(The story corrects paragraph four to show the premium investors demand, not pay, to buy French and Dutch bonds)
(Additional reporting by by David Brett; Editing by Will Waterman)
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