Emergency moves by the European Central Bank yesterday and the €110bn ($145bn) international rescue package agreed over the weekend have failed to quell investor fears about the future of the eurozone as concerns have risen about other member countries' stability.
Investors said contagion could hit weaker eurozone economies, such as Portugal and Spain, with some warning they may also need to be salvaged.
The fresh fears sparked a 0.9 per cent fall in the euro against the US dollar and saw Greek stocks end the day lower, although bond markets across Europe were stable with yields on two-year Greek debt dropping below 10 per cent for the first time in more than a week. Speculators are increasingly betting that the eurozone crisis could escalate as short positions against the euro rose to a fresh record. This is a sure sign the 16-country bloc could come under further selling pressure in coming weeks, investors say.