Yesterday the euro fell to the lowest level since July 2010 against the dollar as investor concern about Spain’s ability to recapitalize troubled banks increased, boosting bets the union’s debt crisis is worsening.

The 17-nation currency dropped below $1.25 for the second time this month after Egan-Jones Ratings Co. reduced its credit rating for Spain to B from Bb-. The euro fell against most of its major counterparts as Spanish officials debated how to fund a recapitalization of the Bankia group.

The yen gained against the majority of its most-traded peers amid increased demand for haven assets.

The pound approached a three-and-a-half-year high against the euro amid the monetary union turmoil. It strengthened as much as 0.2 percent to 79.83 pence per euro after reaching 79.51 pence on May 16, the strongest level since November 2008. Sterling has appreciated 4.1 percent this year.