Euro Tanking as Costs of Italian and Spanish Debt Rise

Euro is tanking today, moving below the psychologically important 1.30 level as funding pressures continue for some eurozone countries. Italian and Spanish debts are more expensive, and European Union leaders are still struggling with a solution that will improve the current situation, as well as prevent future crises.

So far, attempts to come up with a real solution to European funding problems have failed. European Union countries are interested in joining together to tax financial transactions and approve countries’ budgets in Brussels. However, Great Britain has rejected the deal, since EU leaders wouldn’t allow exceptions to rules that would have hurt London as a financial center.
Right now, sentiment is low, and the euro is dropping. Risk appetite has faded away, leaving demand for safe haven. Equities and commodities are falling this morning as investors and Forex traders alike look for less risky currencies. Euro is fading fast, including against the pound, which is seen as a semi-haven in the morass that is Europe.
Euro could see a resurgence if sentiment shifts, but chances of a sustained rally for the euro in the near future are fairly low. In all likelihood, volatility will remain high for the foreseeable future.
At 15:42 GMT, EUR/USD is lower at 1.2981, down from the open at 1.3037. EUR/GBP is lower at 0/8403, down from the open at 0.8422. EUR/JPY is down to 101.2620, off the open at 101.6835.

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