New York - AFP
The European single currency tumbled on Tuesday to a new two-year low against the dollar, as traders questioned whether the latest eurozone deal would resolve Spain\'s massive debt problems. The shared eurozone unit dived as low as $1.2246, the lowest rate since July 1, 2010. By 2230 GMT the euro had risen only slightly to $1.2252. \"Clearly, news that Spanish banks could have access to 30 billion euros by the end of July if necessary has failed to avert concerns surrounding the outlook for the banking sector and the sovereign in that country,\" said Rabobank analyst Jane Foley. After marathon talks in Brussels, eurozone finance ministers agreed to offer Spain 30 billion euros ($37 billion) this month to help its distressed banks. They also extended a deadline for Madrid to cut its public deficit to the European Union\'s 3.0 percent limit by one year to 2014 because of the difficult economic conditions. But traders were unimpressed. \"Eurozone finance ministers have agreed to a 30-billion-euro aid package that can be made to Spain by month\'s end, and in response, both Spanish short- and long-term bonds\' yields have fallen back,\" said DailyFX currency analyst Christopher Vecchio. \"However, with uncertainty lingering -- how many more bailouts will Spain need? -- the euro has fallen across the board.\" Many investors remain highly skeptical that European policymakers are able to resolve the region\'s long-running debt problems. \"Investors are unconvinced, yet again, that policymakers can come up with durable solutions to the eurozone debt and banking crisis,\" added VTB Capital economist Neil MacKinnon. The pound fell 0.06 percent to $1.5517. The dollar fell more than 0.2 percent to 79.39 yen and was virtually unchanged against the Swiss franc at 0.9802.