(Date Posted:05/31/2012 10:22 AM)
FOREX-Euro pinned near 2-year lows as Spanish angst deepens
Tue May 29, 2012 7:11am EDT
* Euro stays near last week's low just below $1.25
* Spanish banking problems overtake worries about Greece
* Doubts grow whether Spain can support ailing banks on its own
By Jessica Mortimer
LONDON, May 29 (Reuters) - The euro slipped against the dollar on Tuesday, edging closer to two years lows as investors and speculators sold the common currency on persistent worries over Spain's escalating borrowing costs and its weakening banking sector.
Analysts and traders said the euro could weaken to fresh lows in the near term given the extent of the concerns surrounding the euro zone debt crisis and the risk of contagion.
Worries about the cost of shoring up Spain's banking system kept Spanish debt yields elevated while the gap between them and German 10-year yields remained near euro era highs, as the risk grew that Spain may be forced to seek an international bailout.
The euro traded at $1.2530, off a day high of $1.2575 as demand from corporates and Middle East names faded.
When are we going to see PAR
1stweeek 2009...........886577 / 763682 = 1.16
Today........................1105938 / 879746 = 1.25
The first figure is FRN's in millions. The second figure is Euro's in millions.
As you can see at the beginning of 2009 there was 1.16 worth of FRN for every Euro. Today it is 1.25.
Parity has a snowballs chance in hell.
Don't bet your shorts!