In Asian trading, the Euro slipped close to a multi-year and historic lows versus the Japanese Yen and the Australian Dollar as investors’ fears over a Spanish default escalate. Last Friday, E.U. finance ministers met and agreed to the terms of a €100 billion bailout package for Spain so that it could recapitalize its banks, but investors have looked beyond the banking sector and recognized the worsening situation in the Spanish government itself.
As reported at 10:3 a.m. (JST) in Tokyo, the EUR/JPY pair was trading at 94.74 Yen, a nearly 12-year low while the EUR/USD was holding close to a 25-month trough when it traded at $1.2103 and is edging closer to $1.1876, the low of 2010. The Euro struck a record low versus the Australian Dollar trading at A$1.1671.
Adding to the Euro’s pressure is worry that China’s manufacturing data which is to be released tomorrow will show more weakening; later this week GDP data from the U.S. and the U.K. are also likely to show more softness.
The beneficiary of the risk aversion is the safe haven currencies, namely the Yen and the U.S. Dollar. The U.S. Dollar Index gained 0.3% to trade at 83.69 .DXY, rising above the 0.7% gains made last Friday.