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The euro weakened to the least versus the yen since November 2000 and to a two-year low against the dollar on concern European policy makers aren’t doing enough to resolve the region’s financial crisis.
The 17-nation shared currency added to its three-week loss versus the greenback as Spain said the recession will extend into next year as the region of Valencia prepared to seek a rescue from the central government. Spanish borrowing costs approached a euro-era record high even after European finance ministers gave full approval to an aid package of as much as 100 billion euros ($122 billion) for the nation’s banks.
Spain’s benchmark 10-year bond yield climbed to as high as 7.284 percent, almost matching the 7.285 percent it touched a month ago. The 7 percent level was the threshold for global bailouts of Greece, Ireland and Portugal. Debt due in 2020 issued by Catalonia, the biggest Spanish regional economy, yielded 13.24 percent.
The yen and dollar rose against most major currencies as investors sought safety, while the euro fell against most.
The euro headed for a third weekly loss against the dollar and a fourth weekly drop versus the yen.
The pound appreciated 0.3 percent to 77.88 pence per euro and reached 77.71 pence, the strongest level since October 2008. The U.K. currency fell 0.6 percent to $1.5626.
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