• Nene's SAA nemesis

    No political figure seems to have the guts to speak out against Dudu Myeni, says Solly Moeng.

  • The mp3 revolution

    Ian Mann takes a look at the war between digital music and the compact disc.

  • Don't take us for fools

    It's time for businesses to stop thinking consumers are gullible, says Mandi Smallhorne.

All data is delayed
See More

Euro plummets on debt worries

Jul 16 2012 09:59

London - The euro hit a three-and-a-half year low against sterling and German bond prices extended last week's gains on Monday as investors worried the European Central Bank had changed its stance on how some bondholders could be treated under Spain's bank bailout.

However, markets were waiting for testimony from US Federal Reserve Chairperson Ben Bernanke later in the week for any hints of new stimulus to help the economy and this tempered price moves.

There are also signs China's monetary authorities may ease further to support the slowing economy were supporting oil and other commodities.

"Spanish and Italian speculation remains at the fore. To me sentiment still feels fragile... we're just waiting for the next development there," one fixed income trader said.

The ECB declined to comment on a report in the Wall Street Journal saying President Mario Draghi had advocated imposing losses on holders of senior bonds issued by the most severely damaged Spanish savings banks.

This would be a change to the ECB's previous stance and worried investors and could set a precedent for future bailout packages.

The euro fell 0.1% to 78.55 pence in early London trade, its lowest level since November 2008. Germany's 10-year bonds gained 1.5 basis points sending its yield down to 1.24%.

German debt has been the investment of choice for investors seeking shelter as yields have risen on Spanish and Italian bonds as weak economic conditions threaten to overcome the effort to rein in their budget deficits.

European shares edged down on Monday after registering a sixth straight week of gains on Friday. The FTSE Eurofirst 300 index of top European shares was down 0.2% at 1040.50 points.

europe debt crisis  |  dollar  |  markets  |  euro


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Marketing is a big concern in SA's small business community, followed by a lack of confidence and partnering with the wrong people, according to a survey.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The 25 basis points interest rate increase is:

Previous results · Suggest a vote