Spanish debt prices up on new Euro fears

Spanish borrowing costs jumped at bond auctions today, spreading fear of a return to the Eurozone debt crisis with Spain as the focus. The Euro has weakened, giving us exchange rates at the top end of recent trading, good news for anybody making Euro money transfers.

The bond auction overshadowed a more successful step back into the debt markets for Portugal. Spain sold €2.6bn at an average interest rate of 5.34%, up from 5.15% in September.

Concerns Spain will struggle to meet its tough deficit targets are likely to dominate headlines in the weeks to come, although with UK banks highly exposed to Spanish debt, it is questionable whether there will be a large effect on the exchange rate from sterling to Euros.