The Euro struck a new 2-year low in Asian trading as investors’ concerns over rising borrowing costs for Spanish debt, and indeed, the Spanish banking system, are weighing significantly. The yield on a 10-year bond rose to a 6-month peak yesterday, and the Spanish sovereign debt sell-off has driven up by 5 basis points the spread differential between Spanish and German debt.
As reported at 2:11 p.m. (JST) in Tokyo, the Euro was trading at $1.2467, a decline of 0.3% from late trading in New York; the EUR/USD pair had earlier fallen to $1.24572 on the EBS trading platform. A failure to once again break through resistance at $1.2625 is keeping the Euro-Dollar vulnerable to further declines. The common currency dipped even further against the Japanese Yen, dropping 0.4% to trade at 99.03 Yen, not far from the 4-month low struck yesterday.
Commodity-linked currencies in general continue to decline; the Aussie Dollar slipped 0.5% against the U.S. Dollar to $0.9790, just off the 6-month low of $0.6960 struck just last week. Earlier today, it was reported that retail sales in Australia fell below expectations, giving rise to speculation that the Reserve Bank of Australia could soon move to lower interest rates to shore up the flagging economy.