The euro slumped to a near two-year low against the dollar on Wednesday with no relief in sight as Italian borrowing costs soared and concerns mounted over Spain's banking sector. Selling accelerated after the euro broke beneath the psychologically important $1.25 level and option barrier at $1.24, opening the way for a slide toward the low $1.20 area.
Real money and institutional investors stepped up selling on signs the bloc's debt crisis is spreading to larger economies. The euro fell as low as $1.2384 on Reuters data, the lowest since July 1, 2010. It was last at $1.2402, down 0.8 percent on the day. Support now lies around $1.2150, a low touched in late June 2010, and then the 2010 low of $1.1875. The dollar also rose to a 15-month high against the Swiss franc at 0.9696 francs on EBS.
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