Euro steadies against US dollar


AFP

TOKYO–The euro steadied against the U.S. dollar in Asia on Friday but sentiment remained sour after Spain and France faced a sharp spike in borrowing costs as eurozone sovereign debt fears deepened. The euro traded at US$1.3476 and 103.59 yen in Tokyo trade against US$1.3457 and 103.60 yen in New York late Thursday. The dollar eased to 76.87 yen from 76.98 yen. Aggressive euro selling took a pause in Asian trade on the back of short-covering. Investor concerns over the debt crisis gained momentum overnight in the wake of troubled new Spanish and French bond issues and rising borrowing costs for under-pressure countries such as Italy to dangerously high levels.

In a poorly received auction, Spain’s treasury had to pay a record 6.975 percent when it raised 3.6 billion euros in a sale of 10-year bonds. France, the eurozone’s second-largest economy, also was forced to pay sharply higher rates to raise 7 billion euros in new bond sales. Despite new governments taking over in Italy and Greece to push through key reforms, Italian benchmark 10-year bond yields once again topped 7.0 percent, a level considered as unsustainable.

In Italy, Prime Minister Mario Monti laid out radical economic reforms on Thursday aimed at cutting Rome’s huge debt mountain, boosting growth and preventing Italy from dragging down the eurozone.