Euro Rose After Debt Auctions - 20.1.2012
US Dollar
The dollar dived further yesterday against the major counterparts, sending the currency’s index to the lowest level since January 4 – 79.99. Economic reports from the United States suggest the biggest economy’s recovery is on the way. Initial jobless claims fell last week to the lowest level in almost four years, contributing to further decreases in unemployment. The number of applications fell by 50000 to 352000. Today analysts expect the National Association of Realtors may say US existing home purchases increased by 5.2% in December.
As investors lowered demand for the safety of the US unit, the dollar weakened against risk-related currencies, staying close to two-month lows against the aussie and touching a one-week low against the loonie. Only the Japanese yen looks less attractive than the greenback among the majors. The dollar touched yesterday its highest level against the yen since January 6 – 77.34.
Euro
The euro maintains gains versus the dollar and the yen after the European Central Bank President Mario Draghi said “I am confident that the euro will be in better shape in 2012 because I look at the progress that has been achieved on the two root causes of the situation, namely lack of fiscal discipline and lack of structural reform.” Greece meanwhile is taking another round of talks with private creditors on a debt-swap plan.
The single currency rose yesterday from 1.2838 to 1.2973 against the dollar and even touched in Asian trading hours today its two-week high 1.2987. Yesterday Spain raised 6.61 billion euros in a sale of bonds maturing in 2016, 2019 and 2022, exceeding the maximum target of 4.5 billion euros. The bid to cover ratio for 2016 notes rose from 1.7 last week to 3.2, decreasing the nation’s borrowing costs. France managed to raise 7.97 billion euros in a sale of medium and long-term securities.
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