The euro plunged on Wednesday crossed the level of 1.24 versus the US dollar on Wednesday on raise worries over the European debt crisis. The dollar index DXY which tracks the US dollar’s movement against the basked of 6 major rival currencies jumped to 83.053 on Wednesday as compared to 82.468 on Tuesday’s North American trading session.

The euro declined to 1.2360 against the US dollar on Wednesday as compared to 1.2493 on Tuesday’s North American trading session. The pair EUR/USD last reached as level lower than $1.24 bank in June 2010. Analysts think that the next support level for the pair EUR/USD stands at 1.20.

Euro fell mainly on reduced rating of Spain to B from BB- while the European Central Bank also turned down Spain’s proposal to recapitalize its one of major banks the Bankia SA. Yields on 10-year Spanish bond gained to 6.685 percent reporting the increase of 22 basis points. The yield on Spanish debt has reached their highest level since inception of the single currency which raised many concerns.

Research director, Kathleen Brooks from Forex.com commented, “There is an air of inevitability about Spain, similar to what happened with Ireland and Portugal, when the rise in their bond yields seemed unstoppable, The situation in Spain is getting ugly, a bailout could cost upwards of 380 billion euros, and we don’t even know if Germany is willing to provide this sort of cash, especially since it seems unlikely that Greece and Ireland will be able to return to the capital markets next year for financing.”

Among other currencies, the British Pound declined to 1.5488 against the US dollar on Wednesday as compared to 1.5640 on late Tuesday. Against the Japanese yen, the US dollar fell to 79.09 on Wednesday as compared to 79.49 on Tuesday’s session.

The greenback ended higher on Tuesday after a volatile session despite successful Spanish debt auction and increased in German investor confidence data. Spain sold treasury bills of more than 3 billion euros of worth but the yields were much higher than the March auction. In Germany, ZEW index of expectations gained to 23.4 as compared to prior reading of 22.3 while analysts expected the figure of 20.0.

According to analysts, high demand of Spanish bonds did boost the single currency for some time but the gains were short lived as high borrowing cost in periphery countries continues to raise risk of debt crisis.

The euro ended lower at 1.3127 against the US dollar on Tuesday as compared to 1.3173 on Monday’s late trading hours.

The dollar index DXY which tracks the greenback’s movement versus its six major counterparts gained to 79.561 on Tuesday as compared to 79.530 on Monday’s North American trading session. The dollar index touched its intraday high of 79.764.

Among other currencies, the British Pound fell to 1.5933 on Tuesday as compared to 1.5907 on late Monday. The British Pound declined in reaction to increase in inflation which jumped to 3.5 percent in March as compared to 3.4 percent in February. It is perceived that Bank of England would not be able to back its quantitative easing program in the next month.