By: Barbara Zigah

The Euro struck a fresh 5-week low against safe haven currencies in Asian trading today as investors shunned the common currency following another tumultuous day in the European sovereign bond markets. As reported at 10:33 a.m. (JST) in Tokyo, the Euro slipped 0.1% against the U.S. Dollar, to trade at $1.3452, rebounding from a session low of $1.3421 on the EBS trading platform. Analysts say that support levels can be found around $1.3405 and $1.3408. Against the Japanese Yen, the Euro slipped to 103.62 Japanese Yen, a decline of 0.1% but off the 5-week trough of 103.40 Japanese Yen struck earlier in the trading session; support can be seen around 103.32 Japanese Yen.

Yield spreads have begun to widen in Austria and Belgium, following the track of Italy, Spain and France’s bond auctions, which has sparked investor fears that the contagion is spreading, and led to calls for more intervention by the European Central Bank.

Another worry compounding an already volatile situation is the downgrade by Moody’s Investor Service of a dozen of Germany’s public-sector banks; Moody’s cited their belief that they would be less likely to obtain governmental financial support if needed.