NEW YORK ( TheStreet) - U.S. dollar was firmer vs. the majors, with EUR/USD so far unable to climb above 1.2350. Widening peripheral bond spreads are likely to become a bigger issue, with Spain the latest to succumb to contagion fears. We think the current euro correction could go as high as 1.25, but we continue to view this move as a correction, not a trend change.There have been several press reports in recent days, all vehemently denied, that a multilateral effort is underway to put together a special aid package for Spain. Often times, one hears "where there is smoke, there is fire." Yet in this case, the denials look credible. The European Financial Stabilization Facility (EFSF) which is the lion's share of the €750 billion package, is only coming into effect at the end of the month.
Spain Contagion Fears Weigh on Euro
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