The Euro continues to trend lower as worries over Spain’s finances send investors to the safe haven currencies; as reported at 1:12 p.m. (JST) in Tokyo, the EUR/USD was trading at $1.2269, a drop of 0.1% but holding above the 2-year low struck last week on the EBS trading platform. Against the Yen, the Euro fell 0.1% to trade at 96.39 Japanese Yen, recovering from a 7-week low of 96.131 Yen struck yesterday. The Euro traded to a record trough against the commodity-linked Aussie during late Thursday trade, with the EUR/AUD pair dropping at one point to A$1.1735, before recovering more recently to A$1.1782; one analyst believes that that is now likely to be an ongoing trend.
In Spain, yesterday’s 10-year auction of Spanish sovereign debt saw lackluster demand and yields which moved above 7%, intensifying fears that Spain’s government will not be able to avoid default and will ultimately require its own bailout. Recent auctions of German and Dutch sovereign debt has also given investors reason to fret; yields on 2-year bonds turned negative, which has some speculators considering a move out of Eurozone assets to those which offer at least some return on investment.