BS: Euro Declines Versus Dollar as Spain Bank Concern Damps Demand
The euro fell to the lowest level since July 2010 against the dollar as investor concern about Spain’s ability to recapitalize troubled banks increased, boosting bets the union’s debt crisis is worsening.
The 17-nation currency dropped below $1.25 for the second time this month after Egan-Jones Ratings Co. reduced its credit rating for Spain to B from Bb-. The euro fell against most of its major counterparts as Spanish officials debated how to fund a recapitalization of the Bankia group. The yen gained against the majority of its most-traded peers amid increased demand for haven assets. Sweden’s krona and the Norwegian krone weakened.
“Spain is coming back into focus,” said Mary Nicola, a currency strategist at BNP Paribas SA in New York. “It’s all about what happens with Spain and their banks, and what could be the scenario in terms of how much money they ask for. But there’s still that Greek shadow.”
The euro fell 0.5 percent to $1.2476 at 12:13 p.m. New York time after touching $1.2467, the lowest since July 1, 2010. It has lost 5.8 percent in May, the most since September. The euro declined 0.6 percent to 99.05 yen and has dropped 6.3 percent this month. The yen was little changed at 79.48 per dollar.
To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
