Forexpros – The euro traded flat against the U.S. dollar Tuesday, as concerns over the logistics of Spain bank bailout pushed the country’s borrowing costs to a euro-era high.
EUR/USD hit 1.2483 during U.S. afternoon trade, flat on the session
The pair was likely to find support at 1.2360, the low of May 30 and resistance at 1.2528, the session high.
The euro turned lower as the yield on Spanish 10-year bonds climbed to a record high of 6.82%, moving closer to the critical 7% threshold which precipitated bailouts in Greece, Ireland and Portugal.
Meanwhile, the yield on Italian 10-year bonds climbed to 6.27%, up from 6.17% earlier in the day.
The euro rose to a session high against the greenback earlier, boosted by hopes that Spain’s bailout would help to stabilize markets.
However, Spain’s borrowing costs pushed higher amid uncertainty over the source of the rescue funds and whether the bailout repayments would add to the country’s already high borrowing costs.
Investors also remained nervous prior to Sunday’s general election in Greece, which could decide the course of the country’s future in the euro zone.
The euro was down against the pound and the yen, with EUR/GBP falling 0.48% to hit 0.8022 and EUR/JPY down 0.02% to hit 99.15.
In the U.S., official data showed that import prices fell broadly in line with market expectations in May, while the previous month’s figure was revised to a flat reading.
The U.S. Bureau of Labor Statistics reported import prices fell by a seasonally adjusted 1.0% in May, in line with expectations.
Import prices for April were revised to a flat reading from a previously reported decline of 0.5%.
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