Spanish Woes cause Australian Dollar Weakness

Spanish bonds have hit 7.5% today and six of Spain’s regions have told the government that they will need extra funding. Spain has already asked and been given a bailout of its banks last week and this could cause panic across the 17 different Eurozone nations as this could trigger a bailout for Spain in the next few weeks. Stock indices across the globe have all fallen by over 1.5% today and Spanish banking shares in particular have been heavy hit. Short selling has been banned in Spain for three months in order to put a stop to the problems.

The resulting fears has caused the Australian Dollar to weaken against Sterling as investors move out of perceived riskier currencies and sought the relative safety of the Pound. The AUD has recently benefited from the stability within Europe following the conclusion of the Greek issue but now we could see a strong moe for GBPAUD exchange rates. As of time of writing the GBP is trading at 1.5120 on mid-market.

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