Euro Pressing Lows as Support Withers (FXE)
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The spot rate of EUR/USD posted fresh lows again today at 1.2235. In the past 5 trading session CurrencyShares Euro Trust (NYSE: FXE) lost 2.50 percent.
The move lower came as Europeans fretted over bonds in Italy, with officials laying the groundwork for possible bond buying. At the same time, EU official quickened efforts to provide aid to Spanish banks.
Italian Prime Minister Monti has been complaining of spillover from Spain's trouble banking system. Yields on both Italian and Spanish bond traded slightly lower, and equity markets closed higher across Europe.
Despite these gains, currency traders continue to punish the Euro, which has seen very little support recently. The ECB cut key interest rates in the region last week and this is what traders say sparked the latest leg down. Bears are now eyeing multiyear lows at 1.19. Bulls are hoping for a catalyst that could trigger a reversal and a potential short squeeze. For now, no immediate catalysts appear on the horizon.
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The move lower came as Europeans fretted over bonds in Italy, with officials laying the groundwork for possible bond buying. At the same time, EU official quickened efforts to provide aid to Spanish banks.
Italian Prime Minister Monti has been complaining of spillover from Spain's trouble banking system. Yields on both Italian and Spanish bond traded slightly lower, and equity markets closed higher across Europe.
Despite these gains, currency traders continue to punish the Euro, which has seen very little support recently. The ECB cut key interest rates in the region last week and this is what traders say sparked the latest leg down. Bears are now eyeing multiyear lows at 1.19. Bulls are hoping for a catalyst that could trigger a reversal and a potential short squeeze. For now, no immediate catalysts appear on the horizon.
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