Investing.com - The euro tumbled to a 10-year low against the traditional safe haven yen on Wednesday, as concerns over the unresolved sovereign debt crisis in the single currency bloc weighed.
EUR/JPY hit 99.29 during European afternoon trade, the pair’s lowest since December 2000; the pair subsequently consolidated at 99.31, tumbling 0.81%.
The pair was likely to find support at 97.90 and resistance at 100.24, the session high.
The euro weakened broadly after a closely watched auction of German government bonds met with lackluster investor demand and failed to ease investor concerns over borrowing conditions in the euro zone.
Germany sold EUR4.06 billion of 10-year bonds at an average yield of 1.93%, compared with 1.98% at November's launch of the January 2022 bond, which was the worst German bond auction on record.
The auction came after data showed that service sector activity in the euro zone contracted for the fourth consecutive month in December, albeit at a slower pace than initially estimated, underlining fears that the financial crisis is creating a drag on growth in the region.
Adding to concerns over the euro zone’s debt woes, bank deposits at the European Central Bank's overnight facility reached a new all-time high of EUR453 billion on Tuesday, underscoring the unwillingness of European lenders to lend to each other.
The euro was also sharply lower against the U.S. dollar, with EUR/USD tumbling 0.85% to hit 1.2937.
Also Wednesday, official data showed that the rate of consumer price inflation in the euro zone eased to 2.8% from 3% in December, supporting the view that the ECB could cut rates further to bolster growth.
EUR/JPY hit 99.29 during European afternoon trade, the pair’s lowest since December 2000; the pair subsequently consolidated at 99.31, tumbling 0.81%.
The pair was likely to find support at 97.90 and resistance at 100.24, the session high.
The euro weakened broadly after a closely watched auction of German government bonds met with lackluster investor demand and failed to ease investor concerns over borrowing conditions in the euro zone.
Germany sold EUR4.06 billion of 10-year bonds at an average yield of 1.93%, compared with 1.98% at November's launch of the January 2022 bond, which was the worst German bond auction on record.
The auction came after data showed that service sector activity in the euro zone contracted for the fourth consecutive month in December, albeit at a slower pace than initially estimated, underlining fears that the financial crisis is creating a drag on growth in the region.
Adding to concerns over the euro zone’s debt woes, bank deposits at the European Central Bank's overnight facility reached a new all-time high of EUR453 billion on Tuesday, underscoring the unwillingness of European lenders to lend to each other.
The euro was also sharply lower against the U.S. dollar, with EUR/USD tumbling 0.85% to hit 1.2937.
Also Wednesday, official data showed that the rate of consumer price inflation in the euro zone eased to 2.8% from 3% in December, supporting the view that the ECB could cut rates further to bolster growth.