Euro flat as borrowing rates in Italy, Spain rise

AP News
Posted: Jun 12, 2012 3:51 PM
Euro flat as borrowing rates in Italy, Spain rise

The euro was flat against the dollar Tuesday, even as borrowing rates in Italy and Spain soared, a sign that investors are worried about the finances of both countries.

Traders are concerned that a $125 billion rescue plan for Spain's financial industry offered by other European countries is only a temporary fix for Europe's debt crisis.

The interest rate on Spain's 10-year benchmark bonds jumped as high as 6.82 percent. Italy's yields rose just over 6 percent.

On Monday, Italy said that its economy contracted in the first quarter, raising fears that it may be the next country to ask for a bailout.

The euro was unchanged at $1.2498 late Tuesday.

The dollar was mixed against other currencies. The British pound rose to $1.5570 from $1.5498. The dollar fell to 1.0270 Canadian dollar from 1.0305 Canadian dollar.

The dollar rose to 79.49 Japanese yen from 79.44 yen and to 0.9610 Swiss franc from 0.9609 Swiss franc.