difficulty raising funds amid debt crisis in the region After The euro weakened

The euro weakened on speculation some European nations will have difficulty raising funds amid debt crisis in the region after the rating companies downgraded the credit quality of Ireland and is considered further cuts.

The single currency has depreciated against 14 of 16 major counterparts, fell to a two week low against the dollar and the yen as Moody's Investors Service downgraded two lenders based in Dublin to junk status. Costs to ensure France's public debt rose to a record, indicating the nation may be at risk of losing their top rating. The Swiss franc rose to a record high against the euro as investors sought refuge from the situation in the area of sovereign debt.

"We clearly have a whiff of panic in the air," said Boris Schlossberg, director of currency research at GFT Forex online merchant in New York. "Market players run from one story to the next until it comes to the base. At this point, everyone is playing the domino theory."

The euro fell 0.7 percent to $ 1.3101 as of 10:46 am in New York, the weakest since 02 December. The common currency fell 1 percent to 109.65 yen from 110.77 yen, the lowest since Dec. 7. The U.S. currency fell 0.4 percent to 83.69 yen from 83.98 yen.

yields on ten-year bond fell six basis points to 3.27 percent after touching 3.26 percent, the lowest level since 13 December.

Earnings, Yen

"With what is happening in yields, which has a specific impact on the dollar-yen," said David Watt, senior currency strategist at RBC Royal Bank of Canada Capital unit in Toronto. "The fact that we are seeing dollar-yen react positively to the widening of me says it's the growth impact of fiscal stimulus."

Barack Obama President on December 17 signed into law a bill 858 billion U.S. dollars of tax cuts.

The cost of insuring the debt of the French government has tripled this year, reaching a record high of 105.5 today, according to data provider CMA.

Swaps credit-default linked to French bonds implies a rating of Baa1, seven steps below its actual range of the top of Aaa by Moody's, according to the group of companies based in New York market research capital.

French Scene

"This means that you have something like an increase in risk appetite," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC in Greenwich, Connecticut. "The euro is clearly falling behind."

The ECB said it had "serious doubts" that the Irish bills to fix the banking system threatens the central bank's ability to execute its liquidity operations. The bank said in a position paper dated Dec. 17.

"The ECB is clearly felt that the fact that the Irish government can change the status and treatment of bondholders owner of the Irish banks could increase uncertainty about the security used in financing operations of the ECB" Stephan said Maier, a rate strategist at UniCredit SpA in Milan. "This story also shows that there was a lack of coordination between the ECB and the Irish, who could be weighing on the market too."

Anglo Irish Bank Corp. and Irish Nationwide Building Society, both controlled by the Irish state, had its senior debt ratings cut to junk today by Moody's Investors Service. Moody's has downgraded the credit rating of Ireland for five levels to Baa1 on December 17, the day after Greece placed on review for possible downgrade.

Swiss Haven

The Swiss franc rose to a record of the era of the euro appreciated 1.1 percent to 1.2641. Against the dollar appreciated 0.3 percent to 0.9655.

The Swiss National Bank last week kept the three-month Libor rate target at 0.25 percent in an attempt to keep a lid on the currency. The strength of the franc against the euro has threatened the recovery of exports.

"As Ireland has launched a new outbreak of tension, is considered the work of regional currencies as a safe haven," said Derek Halpenny, European head of currency research at Bank of Tokyo-Mitsubishi UFJ Ltd ,The concern in Europe related to the budget deficit is something that Switzerland does not have to deal with."

The dollar against the euro was boosted by demand for security and optimism in the world's largest economy is improving. The Commerce Department report of 22 December that the U.S. economy grew at a rate of 2.8 percent annually during the third quarter, above its initial estimate of a 2.5 percent pace.

Dollar Index

The dollar index, which tracks the greenback against the currencies of six major U.S. trading partners, including the euro, yen and pound, rose to 0.4 percent.

Exchange Rates Australia, Canada and New Zealand, all the nations whose economies are tied to raw materials, have appreciated by at least 20 percent since the beginning of 2009, its central bank boosted interest rates to curb inflation increase in the prices of their commodity exports.

"The commodity currencies are on the extremes," said Ken Dickson, a money manager who helps oversee 240 billion U.S. dollars at Standard Life Investments in Edinburgh. "The Australian dollar is fully valued. The advantage is limited and would not be defending the long positions."