Forex - EUR/USD close to 5-month low on debt contagion fears
Investing.com
Published Jul 12, 2011 07:30AM ET
EUR/USD hit 1.3838 during European early afternoon trade, the pair’s lowest since March 11; the pair subsequently consolidated at 1.3924, shedding 0.75%.
The pair was likely to find support at 1.3751, the low of March 11 and resistance at 1.4061, the days high.
Earlier in the day, the cost of insuring Spanish, Portuguese and Greek sovereign debt against default surged to euro-lifetime highs, while 10-year Italian bond yields rose to more than 6% for the first time since the inception of the single currency.
Also Tuesday, Dutch Finance Minister Jan Kees de Jager said the possibility of a partial default by Greece in order to put the country’s debt on a more sustainable footing could no longer be ruled out, despite the European Central Bank’s opposition to such a move.
The single currency also came under pressure after International Monetary Fund head Christine Lagarde said the institution was not ready to discuss a second bailout package for Greece.
Elsewhere, the euro was trading close to a record low against the Swiss franc, with EUR/CHF tumbling 1.14% to hit 1.1583.
Later in the day, finance ministers from all 27 European Union nations were to meet to discuss measures to contain the debt crisis.
Options included increasing the size and flexibility of the euro zone’s bailout fund, the European Financial Stability Facility and lengthening the maturities of loans and lowering interest rates for bailed out countries.
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Written By: Investing.com
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