Investing.com - The euro was hovering close to multi-year lows against the other major currencies on Tuesday, as Spanish borrowing costs hit euro-era highs, fuelling concerns that Madrid will be locked out of international credit markets.
During European late morning trade, the euro was hovering close to a two-year low against the U.S. dollar, with EUR/USD down 0.17% to 1.2096.
Earlier Tuesday, Spain successfully auctioned EUR3.02 billion of three and six-month government bonds but at higher yields than in the last auction.
Meanwhile, the yield on Spanish 10-year bonds rose to a euro-era high of 7.59%, well above the 7% threshold considered unsustainable if a country is to remain solvent.
Elsewhere in the euro zone, data showed that that manufacturing activity in Germany slowed to the lowest level in more than three years in July, one day after rating’s agency Moody’s cut its outlook on Germany to negative from stable.
Separate reports showed that manufacturing activity in the euro zone contracted at the fastest pace since May 2009 in July, while the French manufacturing sector contracted at the fastest pace in 38 months.
The weak euro zone data offset a report showing that China’s HSBC manufacturing purchasing managers index improved to 49.5 in July, its highest level since February, from a final reading of 48.2 in June.
While the index remained below the 50 level which indicates contraction, the improvement from the previous month eased concerns over a slowdown in the world’s second largest economy.
The euro was down against the pound, trading just above a three-and-a-half year low, with EUR/GBP losing 0.15% to trade at 0.7802 and remained close to its lowest level in 12 years against the yen, with EUR/JPY down 0.45% to 94.56.
Japanese Finance Minister Jun Azumi reiterated Tuesday that Tokyo was ready to take decisive action against speculative moves or excessive volatility in the yen, in order to shield the largely export based economy from the effects of the currency’s strength.
The euro was little changed against the Swiss franc, with EUR/CHF inching up 0.01% to 1.2009.
The shared currency re-approached record lows against the Australian, Canadian and New Zealand dollars, with EUR/AUD down 0.33% to 1.1773, EUR/CAD losing 0.13% to trade at 1.2330 and EUR/NZD shedding 0.44% to hit 1.5319.
Reserve Bank of Australia Governor Glenn Stevens said earlier Tuesday that Australia’s economy was becoming strong enough to cope with global shocks arising from the euro zone debt crisis or a slowdown in China and added that current monetary policy was appropriate.
Later in the day, the U.S. was to release preliminary data on manufacturing activity, while Federal Reserve Chairman Ben Bernanke was to speak.
During European late morning trade, the euro was hovering close to a two-year low against the U.S. dollar, with EUR/USD down 0.17% to 1.2096.
Earlier Tuesday, Spain successfully auctioned EUR3.02 billion of three and six-month government bonds but at higher yields than in the last auction.
Meanwhile, the yield on Spanish 10-year bonds rose to a euro-era high of 7.59%, well above the 7% threshold considered unsustainable if a country is to remain solvent.
Elsewhere in the euro zone, data showed that that manufacturing activity in Germany slowed to the lowest level in more than three years in July, one day after rating’s agency Moody’s cut its outlook on Germany to negative from stable.
Separate reports showed that manufacturing activity in the euro zone contracted at the fastest pace since May 2009 in July, while the French manufacturing sector contracted at the fastest pace in 38 months.
The weak euro zone data offset a report showing that China’s HSBC manufacturing purchasing managers index improved to 49.5 in July, its highest level since February, from a final reading of 48.2 in June.
While the index remained below the 50 level which indicates contraction, the improvement from the previous month eased concerns over a slowdown in the world’s second largest economy.
The euro was down against the pound, trading just above a three-and-a-half year low, with EUR/GBP losing 0.15% to trade at 0.7802 and remained close to its lowest level in 12 years against the yen, with EUR/JPY down 0.45% to 94.56.
Japanese Finance Minister Jun Azumi reiterated Tuesday that Tokyo was ready to take decisive action against speculative moves or excessive volatility in the yen, in order to shield the largely export based economy from the effects of the currency’s strength.
The euro was little changed against the Swiss franc, with EUR/CHF inching up 0.01% to 1.2009.
The shared currency re-approached record lows against the Australian, Canadian and New Zealand dollars, with EUR/AUD down 0.33% to 1.1773, EUR/CAD losing 0.13% to trade at 1.2330 and EUR/NZD shedding 0.44% to hit 1.5319.
Reserve Bank of Australia Governor Glenn Stevens said earlier Tuesday that Australia’s economy was becoming strong enough to cope with global shocks arising from the euro zone debt crisis or a slowdown in China and added that current monetary policy was appropriate.
Later in the day, the U.S. was to release preliminary data on manufacturing activity, while Federal Reserve Chairman Ben Bernanke was to speak.