Euro Declines to 11-Year Low Versus Yen Before Spain Bill Sale
The euro touched the lowest level in more than 11 years against the yen as a Spanish bill sale tomorrow highlights funding pressures that’s prompted five states in the trading bloc to seek international rescues.
“The foreign-exchange market is going to be watching European bond market developments extremely closely this week,” said Ray Attrill, global co-head of foreign-exchange strategy at National Australia Bank Ltd. (NAB) in Sydney. “The euro-dollar rate will continue to go down.”
The common currency touched 94.91 yen, the lowest since November 2000, before trading 95.09 as of 7:58 a.m. in Tokyo, 0.3 percent lower than the close in New York on July 20. It lost 0.3 percent to $1.2119. The dollar was little changed at 78.46 yen.
Spain will auction bills tomorrow maturing in three and six months. The nation’s benchmark 10-year yield climbed to 7.284 percent on July 20, almost matching the euro-era record 7.285 percent reached a month ago.
Spain created the 18 billion-euro ($22 billion) bailout mechanism this month to help cash-strapped regions even as its own access to financial markets narrows.
Greece’s troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- will arrive in Athens tomorrow amid doubts the country will meet its commitments and reluctance among euro-area states to put up more funds should it fail.
“If Greece doesn’t fulfill those conditions, then there can be no more payments,” German Vice Chancellor Philipp Roesler told broadcaster ARD yesterday.
The IMF will stop paying rescue aid to Greece as it is already clear the nation will not be able to fulfill its promise to cut debt to 120 percent of annual economic growth in euro terms by 2020, Der Spiegel said, citing unidentified European Union officials.
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