The Euro rate plunged to a two-year low versus the U.S. Dollar and weakened against the remainder of its day trading peers as investors sold off Euros in order to purchase high-yield assets. The 17-nation currency fell to the lowest level on record against the Australian Dollar one week after the European Central Bank cut the costs of borrowing money to 0.75%. The shared currency remained under pressure even after European officials indicated that they were willing to offer emergency loans in order to help Spain’s troubled banks. According to reports, the Finance Ministers who met in Brussels recently agreed to make 30 billion Euros available for bank recapitalization through the bailout fund, so as not to involve the government and burden it with debt.
Meanwhile, The Yen gained against the U.S. Dollar and the Euro following the release of economic data out of China showing that trade growth has slowed down. The Customs Bureau said that shipments abroad went down to 11.3% after they had advanced by 15.3 % in May.
Other Forex exchange news revealed that the Canadian Dollar rallied versus the Euro as the agreement between E.U. Finance Ministers to help Spain’s banks failed to dispel concerns the debt crisis is affecting global growth. The Loonie advanced versus the British Pound after the Bank of England’s Governor, Mervyn King, stated that the U.K. isn’t showing any signs of recovery from the recession.
Lastly, The Pound rose to the highest level in 3 ½ years versus the Euro on stellar U.K. Manufacturing data.