Ireland’s Budget Deficit Weakens Euro

The euro dropped today as the speculation that Ireland wouldn’t be able to curb its budget deficit renewed the concerns about the debt crisis in the euro-region.

Ireland announced last week the plan to cut spending by as much as â‚¬6 billion ($8.4 billion) in 2011. Olli Rehn, the European Commissioner for Economic and Financial Affairs, arrives today in Dublin to discuss the spending cuts and the tax increases. The spread, between Irish bonds and benchmark German bunds, maturing in 10 years, widened 12 basis points today to 533 basis points.

EUR/USD dropped from 1.4054 to 1.3932 as of 13:09 GMT today, following the decline to 1.3892.

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