Euro hits new six-week low at $1.3327

LONDON - The European single currency tumbled on Wednesday to a fresh six-week dollar low, as a surprisingly weak German bond sale intensified concerns over the eurozone sovereign debt crisis.

By (AFP)

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Published: Wed 23 Nov 2011, 10:25 PM

Last updated: Tue 7 Apr 2015, 8:19 AM

At about 1600 GMT, the euro slumped to $1.3327 — a level last seen on October 6. That compared with $1.3507 late in New York on Tuesday.

Investors shunned Wednesday an issue of German 10-year bonds, considered the gold standard of eurozone debt, making bids of only 3.9 billion euros ($5.2 billion) for the 6.0 billion euros of securities on offer.

The German Finance Agency called the result a "reflection of the extraordinarily nervous market conditions."

"A failed bond auction in the benchmark 10-year sector is by itself a huge surprise, but that Germany failed to raise the full 6.0 billion euros gives ample concern about the funding markets for sovereign government," said Saxobank analyst Steen Jakobsen.

"Germany is perceived as the safest 'bet' in the market — an asset everyone wants despite a low yield of 1.8-1.90 percent.

"This fail today should be seen as indication of small appetite for risk and illiquidity. It does not raise major concern for Germany, but more for the overall state of the funding markets for government."

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