By: Barbara Zigah
The Euro fell to a new 1-month low versus the safe haven U.S. Dollar and Japanese Yen in Asian trading day as contagion worries escalate following the disappointing outcomes of Italian and French bond auctions. As reported at 11:19 a.m. (JST) in Tokyo, the Euro fell to $1.3460, the lowest trade against the U.S. Dollar in better than 1-month. Analysts say that the next target for the EUR/USD pair is around $1.3405 to $1.3410, with a break likely testing the October 4th low of $1.3145.
The yield spread on Italian sovereign debt moved back above the 7% make-or-break threshold, a result of renewed doubts on the capability of the newly appointed Mario Monti to enact the reforms necessary for the country to avoid economic ruin. One chief currency strategist believes that the markets’ collective doubt is more than enough to push the Euro lower, possibly even to near $1.30 within the next few weeks.
That the Euro remains trading around its 1-month low is a factor of the French auction; the yield spread on French debt over German bunds struck a new Euro-era high, sending the markets into panic that the AAA rated France is next on the contagion hit list.
Euro Weighed by Disappointing Auctions
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.