Forexpros – The euro dropped against the dollar on Friday after Spanish bond yields soared on fears the country will find it increasingly difficult to finance itself and require a bailout.
In U.S. trading on Friday, EUR/USD was trading down 0.93% at 1.2166, up from a low of 1.2145 and off from a high of 1.2283.
The pair was likely to find support at 1.2145, the earlier low, and resistance at 1.2273, the high from July 15.
Spanish bond yields soared to 7.28%, up above the 7% threshold deemed unsustainable by financial markets and reflecting a need for a financial lifeline.
Spain’s Valencia region said it would need assistance from Madrid, which helped push the pair lower.
Earlier this year, the Catalonian government said it would financial assistance from the Spanish government, as the country wrestles with debt burdens stemming from the real estate collapse.
Eurozone ministers did grant final approval to grant Spain a EUR100 billion bailout for its banking sector as well as for regional governments, though investors fear the country will need a sovereign rescue as well.
The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP down 0.35% at 0.7782 and EUR/JPY trading down 1.05% at 95.50.
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