Euro Slumps as Worries About Debt Crisis Reemerge

The euro experienced the sharp drop today as the optimism about Ireland’s bailout waned and the debt problems in other peripheral economies came to attention.
The Irish government announced on the weekend that it would ask for the aid from the International Monetary Fund and the European Union. Now attention are turning also to Portugal and Spain, making one the market participants to wonder how long it’ll take for these countries to follow Greece and Ireland with request for the aid. At the same time, the German Chancellor Angela Merkel continues to persuade the leader of the EU about the necessity of applying the austerity measures to the countries seeking the bailout.
The euro also slid after the tension between North and South Korea escalated, casing the investors’ sentiment turned to the risk aversion. The European currency fell versus the US dollar as the reports about the GDP and the Manufacturing showed better results than the forecasts have promised.
EUR/USD dropped from 1.3626 to 1.3371 as of 21:15 GMT today. EUR/JPY slumped from 113.54 to 111.24, following the drop to 110.73.

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