While risk barometers such as equities and high-beta currencies displayed a risk-on demeanor, Euro-zone uncertainty continues to bubble away in the background with peripheral bond yields notably higher. Spanish debt yields climbed close to the 7 percent region after the latest data showed toxic banking debt increased to an 18-year high – in turn sparking concern Spain’s bailout may not be enough to ring-fence the sovereign from its ailing banking system. The Euro remained the risk currency of most resistance under-performing against its major counterparts despite squeezing out moderate gains against the greenback over the course of the session. The EURUSD pair moved higher towards the 1.23-handle over the session setting intra-day highs of 1.2287. The EURAUD pair maintained a downward trajectory to forge new Euro-era lows of 1.1833 representing a 9 percent fall from highs in May.
Nevertheless, despite the constant threat of an imminent dooms day scenario from the Euro-region, risk contingent currencies soldiered on with the Aussie forging fresh six-week highs again the greenback. At the time of writing the local unit is buying 103.6 US cents with the next level of resistance likely to come just below 104-figure. Local economic data today includes NAB business confidence numbers and RBA FX transactions at 11.30 AEST.