Forexpros – The euro traded lower against the U.S. dollar Monday, after Spanish borrowing costs spiked to a new euro-era high, while broad concerns over the situation in Greece also weighed.
EUR/USD hit 1.2580 during U.S. afternoon trade, the pair’s lowest since Thursday; giving back 0.45%.
The pair was likely to find support at 1.2473, the low of June 13 and resistance at 1.2748, the session high.
The euro came under pressure after the yield on Spanish 10-year bonds surged to a euro-era high of 7.28% earlier, amid concerns that a EUR100 billion bailout agreed earlier this month may not be enough to overhaul the country’s ailing banking system.
The 7% threshold is widely considered unsustainable in the long run and is the level at which Greece, Ireland and Portugal were forced to seek international bailouts.
Meanwhile, the yield on Italian 10-year bonds ticked up to 6.10% amid fears over sovereign debt contagion to the euro zone’s fourth largest economy.
After jubilation of a successful Greek election on Sunday, investors were nervous amid concerns over the ability of Greece’s pro-austerity New Democracy party to form a strong coalition government following Sunday’s narrow election victory.
The euro dipped lower against the pound and the yen, with EUR/GBP slipping 0.12% to hit 0.8038 and EUR/JPY dropping 0.11% to hit 99.42.
Later in the day, U.S. President Barak Obama was to hold a meeting with German Chancellor Angela Merkel, as leaders from the Group of 20 nations gathered for a two-day summit in Los Cabos, Mexico. Investors are awaiting news.
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