Asia Stocks Down As Fed Holds Off On New Stimulus
PARIS (AP) â¿¿ Stock markets slid Wednesday as worries over the ability of European governments to get a handle on their debts also pushed the euro currency to an 11-month low below $1.30.
The euro was down 0.5 percent at $1.2981 by mid-afternoon, just up from its earlier low of $1.2968.
This is the first time the 17-nation currency bloc's currency has traded under $1.30 since January, and represents a fresh sign that Europe's deal last week to enforce more budgetary disciplines on the 17 eurozone countries is meeting with skepticism in the markets.Meanwhile Europe's unresolved debt crisis kept the pressure on its indebted governments, with Italian borrowing costs rising again. The Italian government paid 6.47 percent interest to borrow â¿¬3 billion ($3.95 billion) for five years at a bond auction, up from 6.30 percent just a month ago. The Italian auction provided further evidence that the European deal last week to tighten rules on euro countries has not dealt with the underlying debt problems. "The structural problems in the eurozone remain the market focus, as the governments that have signed up to the plan are now expressing doubts over the ratification process and whether parliamentary backing could be secured," said Chris Walker, an analyst at UBS. "This threatens a drawn-out process for fiscal consolidation which markets may not have much appetite for." Those concerns have come as the economic newsflow continues to disappoint. In the broader eurozone economy, industrial production slipped 0.1 percent in a further sign of weakness many think will lead to a recession. Meanwhile in Britain, which is outside the euro, figures showed unemployment hit its highest level for 17 years, with women and young people bearing the brunt of the deepening jobs crisis as the country's austerity measures and economic weakness began to bite.
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