The euro weakened today, after it previously jumped to the highest level in more than a month, as the concerns resurfaced that some European banks may experience significant losses because of the global economic crisis and on the worries for Ireland’s economy.

John Gormley, the leader of the Irish Green Party, said today that the nation’s sovereign-bond spreads may increase in case Ireland would consider renegotiating with the bondholders of Anglo Irish Bank Corp. Ireland already has pumped €22.9 billion into Anglo Irish, which was nationalized in January 2009. The spread between the Irish 10-year bond and German bunds increased to as much as 3.87 percentage points, the all-time record.

Ireland may require external aid, perhaps from the European Union of the International Monetary Fund, in case of the further losses in the financial sector or if the economic conditions would worsen. Ireland’s economic weakness seriously hit the risk appetite among the traders.

EUR/USD fell from 1.3078 to 1.3048 as of 18:44 GMT today after it reached 1.3158, the highest level since August 11th. EUR/JPY went down from 112.17 to 111.95 after it touched 112.98, the highest level since August 10th.

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