The Irish debt crisis is getting uglier – senior debt holders might be required to “share the burden”. Sharing is caring! This joins other big is a very heavy weight on the falling EUR/USD that receives bad news from all over the continent and has still lots of room to fall until the next support line.
The Irish Times reports that senior debt, that was regarded as safe, is now examined by the IMF / EU / ECB delegation in Dublin.
The source said there was a “common understanding” between delegations from the EU Commission, the European Central Bank and the IMF that senior and junior bondholders should each pay a share of the rescue costs.
The first step would be to seek to “persuade” senior bondholders to participate in the bailout, said the source. “If that doesn’t succeed, the question is how can you force them in a legally-sound way.”
Sharing the burden or participating in the bailout are nice words for saying that the people that lent money will not get their money back. This happens while Spanish bonds continue reaching record high yields – 5.28% on ten-year notes.
There have been talks that Germany pushes Portugal to a rescue package – just in order to stop the snowball before it reaches Spain.
EUR/USD is already at 1.3206, as the bad news meets thin market conditions. The next level of support is at 1.3114, so there’s still lots of room for falls. After this point, the round number of 1.30 provides minor support. A recovery will find resistance at 1.3267, which the pair broke recently.
For more technical levels and analysis, check out the EUR/USD forecast.
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