Euro Drops as Spanish Bond Yields Surge
All the optimism from last week’s EU summit announcement seems to have drained away. Now, the euro is heading lower on concerns about sovereign debt. Nothing seems to have changed, and Spanish bond yields are surging, once again sparking fears that the country will be unable to handle its debt. Euro isn’t getting much help from the ECB, either, and that has many concerned.
Yesterday, the ECB cut rates, but, according to President Mario Draghi, there are no plans to use measures that are considered non-standard to help boost the eurozone economy. The BOE went ahead and expanded its asset purchase program, and many would like to have seen the ECB take that tack. However, Draghi indicated that such measures weren’t even discussed, and that has many disappointed with the outcome.
Forex traders are also looking at the announcement from European leaders from last week, and realizing that it really does nothing to solve problems and pull the eurozone out of its funk. There might be some long-term help on the way — if the agreements hold up — but in the short-term not much has changed, other than the ability of countries to access bailout funds.
At 14:57 GMT EUR/USD is down to 1.2308 from the open at 1.2391. EUR/GBP is down to 0.7937 from the open at 0.7983. EUR/JPY is down to 97.9260 from the open at 0.9783.
If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.
Earlier News About the Euro:
- EUR Slumps as ECB Cut Interest Rates, Reaches Record Low vs. AUD (2012-07-05)
- Euro Heads Lower as Economic Contraction Becomes a Real Fear (2012-07-04)
- Euro Retreats on ECB Rates Speculations & Rising Unemployment (2012-07-02)
- EU Summit Drives Weekly Currency Moves, Euro in Favor Again (2012-06-30)
- Euro Rebounds as Summit Positively Surprises Traders (2012-06-29)