Euro Heads Lower in Forex Trading as Focus Returns to Spain

The euro is heading lower in forex trading on the currency market as Spain is back in the spotlight. After adopting austerity measures, and inspiring some hope in world markets, Spain is again the subject of concern. There are worries that perhaps Spain (and maybe Portugal) may not be able to handle the debt issues after all.

With worries about the continued debt crisis in Europe, the euro has been unable to sustain gains against the U.S. dollar. BusinessWeek reports on the latest issues related to Spain and the euro in forex trading:

“Focus is back on Spain after a couple of days of news about global growth,” said Arne Lohmann Rasmussen, chief currency analyst at Danske Bank A/S in Copenhagen. “Most of the euro’s recent gains came from short covering, and the move up is petering out,” he said, referring to investors buying back euros to unwind bets that the currency will fall.

With focus back on European debt, it is little surprise that the U.S. dollar is gaining the upper hand, and that things are likely to remain challenging for the euro in forex trading.