EUR NEWS: The EUR against the USD continues, but the disbelieve spreads in eur area

The EUR was maintained against the USD Tuesday, despite the lowering by Fitch 18 new Spanish banks that fueled doubts about the effectiveness of European aid plan, while the suspicion was spreading other countries in the euro area.

Around 1800 GMT, the EUR bought 1.2497 USD against 1.2482 USD at 2100 GMT Monday.

The EUR was up slightly against the yen at 99.25 yen against 99.13 yen on Friday.

The USD steadied against the yen at 79.42 yen against 79.43 yen on Friday night.

"It's hard to be optimistic about the EUR these days, while the elections approach in Greece and the Spanish interest rates continue to rise," noted Mary Nicola, strategist at BNP Paribas New York.

In Greece, a victory Sunday in the radical left could indeed cause a renegotiation of the austerity measures implemented to satisfy the conditions imposed by donors of Greece and precipitate out of the country in the EUR area.

In addition to performance against Madrid-bond market, the weakness of the EUR has been "exacerbated by the lowering" notes Tuesday 18 Spanish banks by rating agency Fitch, said Michael Hewson, analyst at CMC Markets, shortly after the Monday of the degradation of the two largest, Santander and BBVA, and the note of Spain last week.

For him, "European leaders continue to look like blind men, groping in the dark looking for a solution to the debt crisis that hit Europe", without announcing specific details, and thus fail not reassure currency traders.
Greeted with relief after the announcement of a European aid up to € 100 billion to address the Spanish banking sector, financial markets, on Monday, was seized by doubts about the effectiveness of these measures and increased pressure on the European currency.

Indeed, the markets' fear above all that (the aid plan) requires even more pressure on debt and the Spanish government "and thus" exposes investors to a greater risk of loss, "observed Lee Hardman, analyst at Bank of Tokyo-Mitsubishi.

And mistrust was being extended to Italy, the third largest economy in the EUR area, which displays a huge debt of more than 1,900 billion EUR (120.1% of GDP at end 2011). Revenue in the crosshairs of the markets, its ten-year bond rates is ironed Monday above the symbolic threshold of 6%.

Finally, the crisis also threatens to spread to Cyprus, including banks, highly exposed to Greece, may also need external support as "the Cypriot government for 12 months just to borrow in the market and investors increasingly skeptical of the ability (the country) to repay its debts, "noted Philip Ryan, an analyst at Currencies Direct.

Around 1800 GMT, the British pound rose against the EUR at 80.27 pence per EUR as against the greenback at 1.5566 USD.

The Swiss franc was stable against the EUR at 1.2009 Swiss francs per EUR as against the greenback at 0.9610 Swiss francs to the USD.

The Chinese currency finished at 6.3705 yuan against one USD for 6.3692 yuan yesterday.