The German minister of finance pinned liability for European assistance on the nation's banks on Thursday, which helped pull down the value of the shared currency of the European Union against the world's reserve currency, Reuters reports.
Wolfgang Schaeuble said contagion of the sovereign debt crisis is likely due to the peril of insolvency in Spain, which helped pull down the monetary unit to its session low. Germany was set to conduct a parliamentary vote regarding aid for debt-hobbled financial institutions in Spain.
"There's a lot of back and forth like a roller-coaster on who's liable for Spanish aid," managing director Boris Schlossberg with BK Asset Management in New York told the news service. "Basically, the Germans are being strict that the liability stays with the sovereign and all that does is exacerbate the debt burden of the sovereign and the market doesn't like that."
Bloomberg reports borrowing expenses and costs in Spain following a debt auction helped drag down the value of the euro.
But losses against the dollar were tempered by U.S. Labor Department data indicating more Americans than projected last week filed first-time jobless claims.
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