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Euro Approaches Two Week Low

The euro was precariously positioned just 0.1% away from hitting a two week low at 2:38 am London time due to concerns of political unrest in Spain and worse-than-expected data from the Italian retail sector.

The yen has enjoyed almost a week of solid gains against the euro as it continues to suffer from Spain’s refusal to formally request a bailout. The political unrest in the nation is now also set to weigh on the euro and poor results for Italy’s retail sector also adds another short term concern for investors to consider.

Italian retail sales declined by just shy of 1% year on year for the month of July. The data confirmed that consumer spending in Italy was falling sharply, with a fourth consecutive month of declines for the industry.

The fact that these issues have arisen in two of the three struggling nations within the Eurozone comes as no real surprise, however it does bring the turbulence within the nations economies to the forefront of investors minds once again, which will likely hit trade volume and currency demand over the next 24 hours, thus lowering the price of the euro as a whole.

Until Spain formally request a bailout the Eurozone is likely to remain in this slump, with markets being shifted on little more than hearsay as investors remain wary of the next plummet.

Concerns are also now mounting that the euro may fall 12 year old against the yen. The multi-nation currency is currently sitting at 100.40 but some analysts feel that there is a strong possibility that it could fall below 94.12 before the middle of next month, a valuation that the euro has remained above since November of 2000.

The euro was sitting at $1.2898 at 2:40am, showing little movement from yesterday’s $1.2899.

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