New Spanish Bailout May Lead to Further EUR Losses

The euro saw a mixed session on Friday, as news that Spain's credit rating was downgraded caused investors to shift their funds away from the common-currency. Against the JPY, the euro fell as low as 98.51 during the overnight session before staging a slight correction to close the week at 99.46. Against the AUD, the euro fell over 100 pips, reaching as low as 1.2582. The EUR/AUD ended up finishing out the week at 1.2617. This week, euro traders will want to continue monitoring any developments out of Spain, specifically in reference to the bailout package it needs. Any indication that the banking troubles the country is currently facing are bigger than originally thought could lead to heavy euro losses. Additionally, with Greece getting ready to hold a much anticipated election next Sunday, traders can anticipate news out of the country to generate market volatility. Any signs that anti-austerity political parties could emerge victorious may lead to additional losses for the common-currency.

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