By: Barbara Zigah
The Euro slipped near a 10-week trough in Asian trading today as investor worries mount over the Eurozone fiscal crisis. Analysts expect that markets will see increased Euro selling following the news that the spread between Italian and Spanish 10-year treasury instruments rose yesterday by 20 basis points, suggesting that investors remain dubious that the recently agreed to Irish bailout plan will be successful.
As reported at 3:39 p.m. (JST) in Tokyo, the Euro traded at $1.3100, a .2% fall and still just slightly above yesterday’s low of $1.3064 struck on the EBS platform. So far this month, the common currency has lost nearly 6% of its value against the greenback, and given the current track, will record the worst performance in a single month since last May.
Some market players suggest that the Euro will be put under further pressure later in the week, when Portuguese and Spanish treasuries are auctioned. They say that if yesterday’s lackluster performance of the Italian bond sales are any indication, the Euro could be in for a significant correction.
One strategist at UBS is warning his clients that there is not much that can stop the Euro’s decline at this point. One forex manager in Tokyo believes that the Euro will be tested this month in the $1.20-$1.25 range because there are so many concerns surrounding the Eurozone.