This week started with talks about the debt issues in Europe and, consequently, the euro dropped, posting the biggest intraday decline against the US dollar in almost a week.
Worries about European peripheral economies intensified as now Italy and Spain were brought to the fore. Italian 10-year bond yields jumped 27 basis points to 6.027 percent today and Spanish 10-year yields climbed as much as 30 basis points to 6.368 percent. Both yields are at the highest level since 1997. The data from Commodity Futures Trading Commission, published last week, showed that traders cut bets advance of EUR/USD to the lowest level since January by July 12.
Steffen Seibert, chief spokesman for Chancellor Angela Merkel, spoke today about determination of Germany’s government to resolve the crisis and about hopes for the European Union summit this week:
We must master this challenge. The way the chancellor sees it, the specific meeting this Thursday is about agreeing precisely on the main points of a new program for Greece, with all relevant details.
EUR/USD fell from 1.4109 to 1.4080 as of 18:22 GMT today after posting the intraday low of 1.4013, the lowest price since July 13. EUR/JPY slipped from 111.58 to 111.31.
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