NEW YORK, Dec 6 (Reuters) - The euro snapped a three-day advance versus the dollar on Monday and selling pressure is likely to continue as doubts grew that European officials would find a common approach to ease the region's debt crisis.
The euro had earlier fallen more than 1 percent to around $1.3250 as traders took profits on its recent gains. The single currency could head back toward its 2-1/2 month low around $1.2970 set last week, traders said.
Yields on Italian, Spanish and Greek bonds and the cost of protecting them against default rose after Germany rejected a call by the International Monetary Fund to increase the size of a 750-billion-euro safety net for debt-stricken members. For details, see [ID:nLDE6B51WU]
Last week, Ireland became the second country after Greece to require an EU/IMF financial rescue and fears are growing Portugal and Spain will be the next to need assistance. That pushed the euro down 7 percent versus the dollar last month.
"What Europe has done is not enough. They have to have eurobonds," John Taylor, chairman and chief investment officer of FX Concepts, told Reuters 2011 Investment Outlook Summit. Taylor runs the world's largest currency hedge fund with assets under management of around $8.5 billion.
"You can't lend money to Ireland or Greece. You're just piling on more debt to them, and it's getting harder and harder to repay."
He said Portugal could be the next country to seek a bailout after Ireland, with Spain after that. This will push the euro to parity versus the dollar by next year, he said.
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