The euro fell today as Spain’s economy entered a recession, fueling concerns that the financial crisis is spreading across Europe. That was the first day of decline against the dollar after four days of gains and the third consecutive session of losses against the yen.
Spain’s gross domestic product fell 0.3 percent in the first quarter from the previous three months. The economy shrank at the same rate in the fourth quarter of the previous year, meaning that Spain’s economy is declining for two quarters in a row and that means the country entered a recession. It is really no surprise, considering that Spain has huge unemployment of 25 percent. The nation’s ministers gather today to discuss budget cuts, but it is very likely that Spain would be forced to request a bailout.
EUR/USD fell from 1.3235 to 1.3217, following the climb to 1.3267, and EUR/JPY was down from 106.23 to 105.96 as of 11:09 GMT today.
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