EUR/USD hit 1.2068 during U.S. trade, the pair’s lowest since mid-June 2010; the pair subsequently consolidated at 1.2120, falling 0.30%.
The pair was likely to find support at 1.1956, the low of June 10, 2010 and resistance at 1.2133, the session high.
Damaging single currency sentiment, the yield on Spanish 10-year bonds was close to 7.50% on Monday, above the 7% threshold widely considered unsustainable if a country is to remain solvent, amid growing fears that Spain will need a full bailout after the state of Murcia followed Valencia in requesting financial aid from Madrid over the weekend.
The spike in borrowing costs came despite euro zone finance ministers approving a package of as much as EUR100 billion to bailout Spain’s banks on Friday.
Earlier Monday, Spain’s Economy Minister Luis de Guindos denied that Madrid will need a full-scale bailout.
The euro found some support after the International Monetary Fund said it was to due start talks with Greece on Tuesday, in the hope of getting the country’s economic reform program back on schedule.
The announcement came after German media reports suggested that the IMF would no longer take part in providing financial aid for Greece, fuelling fears that the country would eventually exit the euro zone.
The euro pulled back from a more than three-and-a-half year low against the pound, with EUR/GBP gaining 0.40% to 0.7816 but remained within striking distance of a 12-year low against the yen, with EUR/JPY down 0.43% to 95.01.
In addition Monday, official data indicated that the euro zone’s consumer confidence index came in at negative 21.6 in July, compared to expectations for a reading of negative 20, after a reading of negative 19.8 in June
No comments:
Post a Comment