Euro continues near 11-month dollar low

| Thursday December 2, 2010 00:00

With the Portuguese government due to auction 500m euros ($651m; £418m) of bonds later, analysts are waiting to see the extent of market interest.

It comes a day after ratings agency Standard & Poor's placed Portugal on credit watch due to the country's huge debts. It said they faced an 'intolerable risk' if the government in Lisbon failed to consolidate public finances.

In early yesterday trading, the euro was up slightly to $1.3020 from its Tuesday low of $1.2969.

Against the pound, the euro was at 0.8377 pence, compared with Tuesday's close of 0.8366.

Meanwhile, on the bond markets, the yield on Portuguese bonds was stable at 6.97 percent.

The higher the yield, the less confidence investors have in the bond.

The yield on German bonds remained around 2.67 percent.

With the Republic of Ireland getting a European Union-led bail-out last week, the concern in some quarters is that Portugal may be the next country that needs assistance.

'The general feeling is that this is a mess that is not going to be easily escaped,' said analyst Robert Ryan of BNP Paribas in Singapore.-(BBC)