Spain’s Troubles Send Euro Lower

Today, Spain’s woes are in focus, and that is sending the euro lower. EUR/USD is below the 1.2500 mark, and possibly heading even lower, thanks to concerns about Spain, as well as uncertainty about Greece and uncertainty about how the Irish will vote tomorrow when it comes to the European Union’s fiscal treaty.

With Spanish bond yields pushing higher, and concerns that Bankia won’t be the last of the Spanish banks that need help from the government, the euro is heading rapidly lower today. Forex traders are concerned about the 17-nation currency, and risk aversion is the story today as the euro heads near a two-year low against the US dollar.
Spain’s debt rating was once again downgraded, and now the country is officially at junk status, according to Egan Jones Ratings Co. Greece continues to struggle, and there is plenty of concern. Yesterday’s earthquake Italy isn’t helping the situation in Southern Europe, either. Plus, tomorrow there is a vote by the Irish to decide whether or not to accept the EU fiscal treaty that has already been rejected outright by Great Britain and the Czech Republic. All this uncertainty is weighing heavily on the euro.
At 13:16 GMT EUR/USD is down to 1.2424 from the open at 1.2502. EUR/JPY is down to 79.0920 from the open at 79.5100. EUR/GBP is down to 0.7980 from the open at 0.7994.

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