NEW YORK (MarketWatch) -- Yields on Italy's 10-year bonds topped 7% on Friday, continuing a steady rise after the European Central Bank's long-term liquidity operation earlier this week. "Yields moving up shows Italian banks that took that capital are not reinvesting it in sovereign debt, and that's a concern," said Christopher Vecchio, a currency analyst at DailyFX. Above 7%, "rates are unsustainable. Countries won't be able to fund themselves in the future. The euro still can't find traction if Italian bonds aren't improving." Italy's 10-year yield tested 7%, Vecchio said, and lately traded down a little under that threshold. The euro EURUSD -0.07% slipped to $1.3041, from $1.3053 late Thursday. The dollar index DXY +0.11% , which tracks the U.S. unit against six other currencies, traded at 79.982, up from 79.929 in late North American trade Thursday.
