Debt fears pulls Euro to 13-month low

| Thursday May 6, 2010 00:00

The euro has fallen to $1.2954 - its lowest level for more than a year.

Share markets in Asia also dropped after heavy falls in Europe on Tuesday. The Singapore market was down 1.5 percent and Hong Kong's Hang Seng index fell 2.1 percent.

Investors remain concerned over the debt crisis in Greece, and the fear that it may spread to other economies.On Tuesday, the Spanish Prime Minister Luis Rodriguez Zapatero was forced to deny rumours that Spain would be next to seek financial rescue, following the agreement of a 110bn-euro ($143bn; £95bn) bail-out package for Greece over the weekend.

Investors have cited Spain, along with Portugal, Ireland and Italy, as the eurozone economies with the most worrying debt problems next to Greece.

Spain and Portugal's cost of borrowing on the bond markets rose again on Tuesday, reflecting investors' fears of default.

There is also scepticism over the chances of success of the Greek rescue plan, with the necessary cost-cutting measures in Greece proving domestically unpopular.

Wednesday (yesterday) sees the beginning of a huge general strike in Greece in protest at public sector cuts.-(BBC)