Euro down to record low against dollar on fears of Greek crisis spreading
06 May 2010
The euro was down to a fresh 14-month low against the dollar on Thursday as worries continued over the Greek debt crisis impacting other countries on the eurozone periphery.
Rising bond yields on Portuguese and Spanish government debt have raised fears of both countries facing difficulties in servicing of their debts and may warrant a bail-out package similar to Greece.
Indeed, although Spain did manage to sell €2.3 billion of five-year government bonds at an auction on Thursday, the country had to pay the highest yield since May 2008.
Another factor that weighed on the single currency was the violent protests that the austerity measures that Athens was forced to accept to receive IMF aid.
According to analysts, the focus of the markets would now shift to the European Central Bank's (ECB) policy meeting later in the session.
According to electronic trading platform EBS, the euro fell as low as $1.2737, its weakest since March 2009, even as investors waited for comments from the ECB as to how it was prepared to help contain the crisis from spreading.
