The euro sank to a six-week low against the dollar in European trade Wednesday as news broke of a poor German government bond auction and after the Bank of Greece warned the country risked exiting the euro zone, reinforcing an already gloomy tone as weak data helped to fan European recession fears.
But the Bund and Euro then plummeted across the board after Germany offered EUR6 billion of new 10-year benchmark Bunds but only managed to sell EUR3.6 billion, prompting investors to worry that the euro-zone debt crisis might even be spreading to its hitherto solid German core.
The Bund dropped over 200 points from earlier morning levels, and is trading 135.30 as I write.
This is worrying times for the Eurozone and this mite lead to more urgent need for some type of Eurozone intervention.
Watch this space
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