EUR/USD has taken out the 1.2950 barriers as the “sell the rallies” mentality prevails on the European sovereign debt rout.
Despite endless talk of Chinese support for the euro zone this week, sovereign spreads continue to widen. Spanish ten-year spreads are out to 271 bp from 245 on Wednesday. We ended just below 260 bp yesterday.
1.2935 the low so far. Traders report bids from smaller sovereigns in the 1.2935/40 area. Model funds continue to sell EUR/GBP, we hear.
