The Euro Dash

As the world prepared to put a period at the end of the 2011 business year, Friday saw the

edge up against the dollar after Spain announced a whole range of measures to control its finances. However, according to

, analysts said the single currency would stay pressured in 2012 as the region's debt crisis continues. The article states that, “Spain's new government outlined spending cuts and tax hikes for the new year but also said that the public deficit for 2011 would come in above target.” Joe Manimbo, a market analyst at Travelex Global Payments, said that, “The euro got a little bit of a boost from the Spain news, but I don't think that's going to offer much meaningful support to the single currency heading into the new year… Since the market is overly bearish against the single currency, that does leave it susceptible to short covering bounces. But overall I think these anti-euro bets are justified given the still-unresolved debt crisis and the poor growth prospects.” The article also states that, “Helped by investors squaring positions before year-end, the euro recouped losses from Thursday, when it sank to a 15-month low of $1.2858 as high yields at an Italian bond auction prompted selling.” "The currency markets are going to continue to take their cue from fixed income and sovereign credit markets" in 2012, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, to Reuters. The article concluded by saying that, “Ten-year Italian yields are above the 7 percent level seen as unsustainable, with the country needing to raise 450 billion euros in debt markets in 2012. Government issuance of new euro zone debt will be scrutinized for any sign investors are shunning the currency bloc. Analysts expect euro zone funding pressures to intensify in early 2012, with 230 billion euros of bank bonds, up to 300 billion euros in government bonds, and more than 200 billion euros in collateralized debt maturing in the first quarter." "Last week the ECB provided banks with almost half a trillion euros in three-year loans at low rates to encourage lending. Some policymakers have urged banks to use the funds to buy Italian and Spanish sovereign debt. But the latest ECB data on Friday suggested banks were hoarding the cash, with 445 billion euros being deposited in the central bank's overnight facility, up from 436 billion euros the previous day.”