Hello Friends
Good morning, good afternoon and good evening
It seems that the Euro is struggling to make any gains and is dipping lower on concerns that Spain’s Banks could fail.
The bad news seems to just keep coming in for the Euro, could it get any worse for the nation?
Let’s take a quick look at Spain’s problem:
First of all the Bankia Group on of Spain’s largest bank back in 2010 required 4.5 billion euro in a rescue and on May 25 that same organization requested another 19 billion Euros to help clean up their balance sheets. Now the problem here is not only that the Bankia Group need additional euro but where were the Euro suppose to come from. It was thought that Spain would use government debt instead of cash to help bail out Bankia but that idea might change.
Second Spain needs to bailout its banks so that can help cash strapped regions as borrowing cost are becoming dangerously high. The Spanish 10- year bonds yields are creeping just over 6.5%, and the 7% level is looked at as critical as previous countries requested bailouts soon after their 10 year yields rose above this threshold.
As the pressure continues to mount on the Euro and Greece, if Spain will need a bailout this could hurt the Euro even more…As the Euro doesn’t have enough problems to worry about.
As a result of the speculation on The Bankia group and the amount of money needed the Euro fell to lows last seen back in 2010 against its US counterpart.
Bloomberg Stats:
“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”
That’s all for now
Until next time
Vladimir
