The euro posted the biggest drop since August 2010 yesterday, reaching the lowest level this month against the dollar and the yen and the lowest price since February against the pound today, as Forex market participants are becoming more and more concerned about the European debt crisis.
The yield in Italy’s 10-year bonds soared to 7.48 percent yesterday. Traders are worried that Italy, like Greece, may struggle to elect a new leader, leading to worsening of the situation with the nation’s debt. Italian lawmakers will vote tomorrow on the austerity measures required to get aid from the European Union. The vote should reveal how committed the nation’s politicians are to deal with the credit problems. There are rumors that Angela Merkel suggested allowing EU member to abandon the euro.
Tensions are high and it’s hard for the euro to find support. Italy will sell the
EUR/USD sank yesterday from 1.3833 to 1.3540 and reached 1.3513 (the lowest level since October 10) before trading at 1.3546 as of 5:58 GMT. EUR/JPY was down from 107.50 to 105.36 yesterday and was at the low of 105.09 (the lowest since October 26) today before trading at about 105.23. EUR/GBP slumped from 0.8594 to 0.8505 on the previous trading session and was at 0.8503 at the current session, following the fall to 0.8497 — the price last seen in February.
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