Euro Plunges 2% on Italian Fears

Reuters

The euro shed 2 percent against the dollar to hit a one-month low as anxiety about Europe's worsening debt crisis boosted selling of the single currency.

The euro fell as low as $1.3557 , well off a session peak of $1.3855 and its worst showing since Oct. 11. It also shed 2 percent to 105.31 yen , its lowest level since Oct. 26.

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Selling picked up after an overnight increase in margin requirements for banks that use Italian debt as collateral pushed Italian government bond yields above 7 percent, a level many investors fear is unsustainable. Italian public debt outstanding is about 1.9 trillion euros.

(Reporting by Steven C. Johnson; Editing by Theodore d'Afflisio)

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