Euro Slips on Strikes in Portugal & Ireland

The euro slipped today as the workers in Portugal and Ireland are planning to go on strike to protest about the planned austerity measures, curbing the appeal of the shared 16-nation European currency.

Portugal’s government announced in September that it’s planning to cut the wage bill by 5 percent for the public workers earning more than €1,500 ($2,000) a month, freeze the hiring and raise value-added taxes by 20 basis points to 23 percent in order to reduce the budget deficit. The workers in Portugal went on the strike yesterday ahead of the final vote in parliament on November 26th on Portugal’s spending plan for 2011, which includes measures to cut the deficit. Ireland’s labor unions are also planning to protest against the austerity measure on November 27th.

The European leaders struggle to contain the surging bond yields in the countries including Portugal and Spain even after the agreement on the bailout for Ireland. The news reinforces the fears of the possible contagion of the budget crisis spreading across the European counties, undermining the confidence in the euro.

EUR/USD traded at about 1.3325 as of 01:13 GMT today after it dropped yesterday from 1.3366 to 1.3333. EUR/JPY traded near 111.24 after it opened at 111.38 and rose to 111.60.

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