Spain and Korea Bring Anxiety on Markets, Aussie Suffers

The Australian dollar extended the decline against its U.S. counterpart and dropped against the euro as the banking crisis in Spain and the conflict between North and South Korea destabilize the markets.

The regulators in Spain, supported by the request of the International Monetary Fund to reform the nation’s financial institutions, press the lenders to unite with larger partners, causing four banks announce about merging. The U.S. plans to perform anti-submarine exercises with South Korea. After the announcement of such intentions the rumors have appeared that the military in North Korea was put on alert.

The expanding crisis in the Euro-zone prompted the National Australia Bank to drop its forecast for Aussie’s parity with the greenback this year. The current forecast is $0.90 per the Australian dollar.

AUD/USD dropped to 0.8214 as of 19:35 GMT today from its opening price of 0.8264. EUR/AUD traded at 1.5010, rising from the opening level of 1.4964.

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