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EUR/USD update (26th July 2012, 15:30)

The euro declined against the US dollar this morning to $1.2125, representing a loss of 0.27%, as Spanish concerns continued to weigh on the common currency.

Yesterday's reprieve for the euro following reassuring comments from an ECB governing council member has proved only temporary. Fears that Spain will soon require a full-blown bailout continued to put pressure on the euro today and discouraged many investors from purchasing the currency.

Spanish bailout worries have also caused Spanish ten-year government bond yields to rise above the critical 7%, which is considered an unsustainable level. Yields eased slightly this morning, with the two-year dropping back below 7% and the ten-year easing to 7.37%, but these levels will need to come down quickly if a bailout is to be averted.

Spain is caught up in the vicious cycle, where more regions seeking central aid will increase the possibility of a full bailout and increase the benchmark ten-year government bond yield, and any increase will most likely cut the beleaguered country out of money markets. 
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EUR/USD update (26th July 2012, 15:30)

The euro declined against the US dollar this morning to $1.2125, representing a loss of 0.27%, as Spanish concerns continued to weigh on the common currency.

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