The Euro remained intensely under pressure on European debt crisis which has turned more worst on the latest news of surging government bond yields for Spain and Portugal.
The Euro declined to 1.30 versus the greenback in overnight trading session. Many traders expect its support around the level of 1.2979 against the US dollar which also happens to be the lowest since mid September.
The Spanish 10-year government bond’s yield premium surged 3 percent on Tuesday which is the highest since 1999. The Italian and Portuguese bonds also surged in reaction resulting in depreciation of currency. Earlier same measure has been taken in case of Ireland’s and Greece’s sovereign debt which also resulted in depreciation of Euro and created more uncertainty in the markets.
Analyst Michael Hewson from CMC Market, “It is now becoming increasingly clear that the only options open for a final solution are to either adopt closer fiscal policies across all European countries, and with austerity fatigue already creeping in across European populations that looks unlikely, or for the single currency to somehow restructure itself in a manner that represents the differences between the respective stronger and weaker economies.”
The dollar index DXY which measures the US dollar’s movement against its major counterpart currencies advanced to 81.149 as compared to 80.797 as on late Monday. The Pound Sterling also declined by 0.2 percent to 1.5531 against the greenback. However against the US dollar dropped to 83.77 against the Japanese Yen as compared to 84.25 as on Monday late trading hours.
