Euro Under Pressure After Spanish Debt Auction

 
on May 10 2013 8:23 AM
Euro Symbol building 2
The euro currency sign is seen in front of the European Central Bank headquarters in Frankfurt. Reuters

The euro lost ground on Friday morning after investors looked to take profits on the common currency's two day rise. The euro traded at $1.3013 on Friday morning.

A Spanish debt auction on Thursday was considered smooth by most as the nation was able to raise more than its maximum target of 4.5 billion euros. The Spanish Treasury sold 4.57 billion euros worth of debt, and will return to the market for another sale next week.

Although the auction appeared successful, Reuters reported that many analysts have the opposite opinion. Some say that because dealers wound up with most of the bonds, demand for Spanish debt was actually quite low. The news weighed on the euro as it underscored the uncertainty facing weak eurozone nations.

Unemployment data on Thursday also contributed to waning confidence in the region as figures in both Greece and Portugal have continued to surge. The Wall Street Journal reported that Greece's unemployment rate stood at 27.0 percent in February, more than double the eurozone's collective rate of 12.0 percent.

The figures showed a deep divide between Northern and Southern Europe as jobless numbers continued to skyrocket in the South. High rates of unemployment and ongoing budget cuts have driven many southern residents to Germany to look for employment.

Data showed that last year Germany opened its doors to 690,937 immigrants, with Greek, Portuguese, Spanish, Italian and Irish people making up nearly 20 percent of that figure.

Staggering unemployment figures have led many eurozone policymakers to question whether pushing on with austerity is the right path for the region's recovery. But German Bundesbank President Jens Weidmann claims Germany's relatively low unemployment figures can be attributed to the kinds of reforms he has been promoting for Southern Europe.

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

 

Copyright Benzinga. All rights reserved.

Share this article