Investing.com – The euro was down against the U.S. dollar on Monday, sliding to a three-day low amid fears the region’s debt crisis would worsen after Spanish and Italian bond yields surge to euro-lifetime highs.
EUR/USD hit 1.4013 during U.S. morning trade, the pair’s lowest since July 13; the pair subsequently consolidated at 1.4037, tumbling 0.83%.
The pair was likely to find support at 1.3950, the low of July 13 and resistance at 1.4198, Friday’s high.
Spanish government bond yields rose to a euro-lifetime high of 6.31%, approaching the 7% mark that prompted peripheral euro zone nations, Greece, Portugal and Ireland to seek bailouts.
Yields on Italian bonds also climbed to a record high of 6.02%, while yields on two-year Greek and Portuguese debt soared to a euro-era record of 34.37% and 24.1% respectively.
Euro zone finance ministers were to meet Thursday to focus on “the financial stability of the euro area as a whole and the future financing of the Greek program,” according to the president of the European Council, Herman Van Rompuy.
The single currency was also weighed after European bank stress tests results failed to ease concerns over the health of the region’s banking sector.
The European Banking Authority said Friday that eight banks out of the region’s 90 top lenders failed its stress tests, with a combined capital shortfall of EUR2.5 billion.
The EBA said 16 banks narrowly passed the stress tests. Of the banks that failed the tests, five were in Spain, two in Greece and one in Austria.
While the results were better-than-expected, the tests did not include the possibility of a sovereign debt default, which many believe was a likely outcome for Greece.
The euro was also down against the pound, with EUR/GBP shedding 0.17% to hit 0.8759.
Earlier in the day, official data showed that U.S. treasury international capital purchases rose significantly less-than-expected in May.
In a report, the U.S. Department of the Treasury said that net foreign purchases of long-term securities totaled USD23.6 billion in May, below expectations of USD48.4 billion.
EUR/USD hit 1.4013 during U.S. morning trade, the pair’s lowest since July 13; the pair subsequently consolidated at 1.4037, tumbling 0.83%.
The pair was likely to find support at 1.3950, the low of July 13 and resistance at 1.4198, Friday’s high.
Spanish government bond yields rose to a euro-lifetime high of 6.31%, approaching the 7% mark that prompted peripheral euro zone nations, Greece, Portugal and Ireland to seek bailouts.
Yields on Italian bonds also climbed to a record high of 6.02%, while yields on two-year Greek and Portuguese debt soared to a euro-era record of 34.37% and 24.1% respectively.
Euro zone finance ministers were to meet Thursday to focus on “the financial stability of the euro area as a whole and the future financing of the Greek program,” according to the president of the European Council, Herman Van Rompuy.
The single currency was also weighed after European bank stress tests results failed to ease concerns over the health of the region’s banking sector.
The European Banking Authority said Friday that eight banks out of the region’s 90 top lenders failed its stress tests, with a combined capital shortfall of EUR2.5 billion.
The EBA said 16 banks narrowly passed the stress tests. Of the banks that failed the tests, five were in Spain, two in Greece and one in Austria.
While the results were better-than-expected, the tests did not include the possibility of a sovereign debt default, which many believe was a likely outcome for Greece.
The euro was also down against the pound, with EUR/GBP shedding 0.17% to hit 0.8759.
Earlier in the day, official data showed that U.S. treasury international capital purchases rose significantly less-than-expected in May.
In a report, the U.S. Department of the Treasury said that net foreign purchases of long-term securities totaled USD23.6 billion in May, below expectations of USD48.4 billion.