The EUR/USD hit a fresh two-year low in morning trading due to concerns about higher debt yields. The pair is currently trading around 1.2450, down close to 130 pips over the last 24 hours. Another Spanish credit downgrade yesterday also affected the price of crude oil, which had been steadily increasing earlier in the week. The price of crude has dropped over $2 a barrel since yesterday afternoon and is currently trading below $90.
Main News for Today
Italian 10-y Bond Auction
• Investors will be watching the bond auction for clues as to whether the debt crisis is spreading to other countries in the euro-zone
• Unless there is solid demand for Italian bonds, the euro could see additional losses as a result
US Pending Home Sales-14:00 GMT
• Analysts are forecasting the home sales figure to come in well below last month’s figure
• Anything below the expected 0.0% could lead to dollar losses against the yen
ECB President Draghi Speaks- 15:30 GMT
• Investors will be monitoring the speech for clues as to any plans to assist Spain recover from its debt issues
• The euro may see additional losses unless concrete steps are outlined to help contain the debt crisis
Read more forex news on our forex blog
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