Euro hits 15-month low on Europe fears

The euro hit a 15-month low against the United States dollar on Thursday after Italys debt auction fueled concerns about the euro-zone debt crisis, while encouraging US economic data lifted Wall Street stocks.According to Reuters, gold prices fell to a six-month low as investors, facing very tight capital markets, sold the safe-haven metal to meet their obligations.The euro fell below $1.29 for the first time since September 2010 after Italy, at the centre of the euro zone debt crisis, sold just over seven billion euros of bonds, well below its target of 8.5 billion euros.Yields on the 10-year paper fell from a recent high but remained just under seven per cent - a level seen as unsustainable in the long run. Italy has a debt burden of around 120 per cent of Gross Domestic Product, and about 150 billion euros in debt coming due between February and April."Theres a real worry now that the first quarter could be crunch time in the euro crisis just because of the sheer volume of debt that needs to be rolled over by euro zone countries," said Standard Chartered strategist, David Mann.The European single currency fell as low as $1.2856, according to Reuters data, its worst showing since September 2010, before rebounding to $1.2906.US stocks rose after falling more than one per cent on the previous day, buoyed by data showing pending sales of existing US homes surged to a 1-1/2-year high in November."Its a strong number. What it says is that things are going along fairly well in the Midwest in terms of current conditions and future conditions," said Fred Dickson, chief market strategist with D.A. Davidson & Co at Lake Oswego.
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