The Euro Zone crisis, which has long been playing an absolute carnage in the global market, has now hammered the final nail to seal the coffin for European economy.
Adding to its woes, the Euro on Monday dipped one percent against Yen to strike its lowest since November 2000.
Earlier on Friday, the Euro slipped under 95 Yen as the majority of dealers were seen sweating bullets over the possible debt crisis in Spain which, if came into picture, will force Spain to sought a complete sovereign bailout.
“Against the euro, we've been seeing quite a strong yen," the authorities admitted. Also, the Euro nose-dived to its two-year low against Dollar, landing on $1.2093 at close on EBS.
Dealers favoring Japan
Yen, the currency of Japan which registered a record-shattering rise against the dollar in 2011, is turning out to be the zone of comfort for investors as well as dealers who are no longer taking interest in the Euro.
The safety of Japanese currency is enticing the bulk of investors because of the ongoing European crisis coupled with a bumbling recovery of the economy in US. However, the boom in Japanese currency has directly made an impact on exporters by increasing the cost of products they ship overseas, along with reducing their net income from shipments.
Japanese Finance Minister Jun Azumi said, “As I've been saying, I will take decisive steps against speculative movement of excessive volatility.”
Spain in sorrow
Spain, which is severely in a state of bother due to heavy debt, met another setback over the weekend. In a recent statement, it was announced by Spain’s Murcia region that it would soon be soliciting financial help from the government in order to stabilize the fragile economy.
Over the weekend, dealers were seen abandoning euro mainly since the cost of borrowing spiked up rapidly on ten-year Spanish bonds, gliding way beyond seven percent. The direct consequences of such a rise will result in a period of lackluster sustainability for the government.
Seeing the overall scenario, analysts are anticipating the recession to stay throughout the next year as well, and no doubt, the Euro will be smashed to smithereens. The major reason inspiring such speculations is that the yields are getting high, while unemployment is already soaring to 24 percent.