The euro drops to a 16-month low due to Hungarian Interest rate rises

The Hungarian forint has dropped to a new record low against the euro since the euro’s introduction back in 1999, as the country scaled back a debt sale. Interest rates rose 0.5% to an unsustainable 7% for the country, which issued fears of a bailout.

France’s cost of borrowing rose and there was lower demand for bonds, which raised fears for the country’s AAA rating.

France sold €8BN worth of bonds and the costs rose from 3.18% to 3.29 on their ten year agreements.

Italy's UniCredit fell 17% before its shares were suspended for the second day in a row. They announced that they would offer these stocks out at a 69% discount, hoping to increase “dash for cash fever”.

Germany's Deutsche Bank fell almost 6%, with Commerzbank down 4.5%.

Spain's Santander dropped 4.5%.

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