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Forex - Dollar tempers gains, digests Europe loan deal

Published 12/21/2011, 10:37 PM
Updated 12/21/2011, 10:42 PM
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Investing.com - The dollar was mixed to slightly lower against the world's major currencies on Thursday, taking a break from earlier gains as the market digested a European Central Bank move to loosen up lending in its crisis-stricken continent.

During Asian morning trade Thursday, the greenback was up against the euro, with EUR/USD slipping 0.02% to hit 1.3045.

On Wednesday, the European Central Bank made EUR489.19 billion in three-year loans available to 523 eurozone banks with the aim of facilitating lending and easing the credit crunch there.

Once markets had time to digest the move, analysts and traders decided in the end, it wasn't enough to make a dent in Europe's financial problems.

The loans also don't address structural economic imbalances in E.U. periphery countries.

Yields on Italian 10-year government bond yields climbed 12 basis points to 6.69 percent while the rate on comparable Spanish debt surged 17 basis points to 5.2 percent, according to Bloomberg data.

Furthermore in the United States, the National Association of Realtors said it revised downward its figures for existing home sales by 14% from 2007 to 2010.

On top of that, crude oil inventories fell by 10.6 million barrels to 323.6 million, outpacing some analyst estimates as much as five times over, which sent the commodity rising in early Asian trading.

The greenback, meanwhile, was up against the pound, with Cable down 0.08% at 1.5663.

Meanwhile, the greenback was up 0.01% against the yen, with USD/JPY trading at 78.07, and stronger against the Swiss franc, with USD/CHF trading up 0.01% at 0.9358.

The dollar was up against its counterparts in Canada, Australia and New Zealand, with USD/CAD up 0.08% at 1.0275, AUD/USD down 0.30% at 1.0073 and NZD/USD down 0.45% at 0.7670.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.04% at 80.32.

Later Thursday, the Bank of Japan will releases its Monthly Report, which contains data policymakers use to set benchmark interest rates.

The U.K. will release its latest gross domestic product growth and business investment figures as well as the country's most recent current account balance numbers.

In the U.S., weekly initial jobless claims will come out along with overall economic growth figures as well.

The Michigan Consumer Sentiment Index will shed light on consumers' moods in the world's largest economy Thursday as well.




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