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The concern that ratings agency Standard and Poors could act on its threat to downgrade ratings across the eurozone saw riskier assets suffer.
Italy's ten-year yield went up 16 points to reach 6.76 per cent and the Spanish equivalent jumped 11 base points higher, reaching 5.92 per cent, according to Reuters.
Caution remains the prevailing mood in the market despite efforts from the recent eurozone meeting to reassure international investors.
"People are picking holes in the summit. It hasn't done anything major and we're looking out for some sort of ratings action sooner rather than later," a trader told the news provider.
Jean-Claude Trichet analysts slashed their end-of-year forecasts for the single currency from $1.40 to $1.32 yesterday as forex traders avoided the euro.
Posted by Clive Arneill
