Italian Borrowing Costs Rise, Euro Suffers

The euro was down today after the costs of the Italian securities surged, renewing concerns about the debt crisis in the European Union.

Yield on the Italian five-year notes jumped to 6.29 percent today from 5.32 percent at the previous auction and was the highest since June 1997. The euro tried to slow its downfall after the news about the government in Italy, but wasn’t successful. Silvio Berlusconi resigned yesterday and Italian President Giorgio Napolitano offered the office of prime minister to former European Union Competition Commissioner Mario Monti yesterday.

EUR/USD was down from 1.3789 to 1.3644 and EUR/JPY dropped from 106.39 to 105.13 as of 13:05 GMT today.

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