Posted On: November 07, 2011
The common currency of the European Union dropped in value on Monday against the U.S. dollar and the Japanese yen as Italy became more deeply ensnared in sovereign debt crisis turmoil, according to published reports.
Silvio Berlusconi, prime minister of Italy, was under pressure to resign as the euro region's third-biggest economy continues suffering from sovereign debt turmoil and large-size debt, according to
Bloomberg. The monetary unit also dropped when compared to the English pound and the Canadian dollar.
"The market will be reluctant to buy the euro for now given negative news out of the region," senior currency strategist Jane Foley with Rabobank International in London told Bloomberg. "The problem in Greece hasn't been resolved and now the market has Italy to worry about. Bond yields suggested the market is pretty nervous, and quite rightly so."
Monday saw the yield of Italian 10-year government bonds touch its widest amount since 1997, which likely does not bode well for the parliamentary vote Berlusconi faces on Tuesday.
Italy's debt trouble presents a very troubling scenario for the euro zone as its borrowing costs have skyrocketed, it is 1.9 trillion euros in public debt, and is believed to hold a debt burden too large to bailout, according to Reuters.
Category: Industry News
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