Investing.com - The U.S. dollar was mixed to higher against its major counterparts in thin trade on Thursday, as Italian borrowing costs remained dangerously high after a long-term bond auction, weighing on demand for riskier assets.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD retreating 0.42% to hit 1.2886, trading close to a fresh one-year low.
With most investors already away on year-end leave, trading volumes were thin, resulting in tight liquidity conditions and irregular volatility.
Market sentiment was hit after Italy’s Treasury sold just over EUR7 billion of long-term debt maturing between 2014 and 2022, below the maximum target of EUR8.5 billion.
The country sold EUR2.5 billion of 10-year bonds, maturing in March 2022, at an average yield of 6.97%, down from November's euro-record high 7.56%. The country also auctioned EUR2.5 billion of three-year bonds, at an average yield of 5.62%.
Following the auction, the yield on Italy’s 10-year bonds traded at 7.1%, above the critical 7% threshold widely seen as unsustainable in the long-term.
The sale was seen as the first test of European banks' willingness to purchase long-term sovereign debt of distressed euro zone countries, following last week’s nearly EUR500 billion cash infusion by the European Central Bank.
Investors were also cautious after the ECB said earlier that its overnight deposits receded to EUR436 billion, after hitting a record of EUR452 billion the previous day, underscoring European banks’ nervousness to lend to each other.
The greenback was also higher against the pound, with GBP/USD dropping 0.34% to hit 1.5405.
Elsewhere, the greenback was lower against the yen and but higher against the Swiss franc, with USD/JPY retreating 0.21% to hit 77.77 and USD/CHF climbing 0.21% to hit 0.9460.
The greenback was moderately lower against its Canadian but higher against its Australian and New Zealand cousins, with USD/CAD declining 0.16% to hit 1.0228, AUD/USD sliding 0.25% to hit 1.0067 and NZD/USD falling 0.28% to hit 0.7667.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.35% to hit 81.19.
Later in the day, the U.S. was to release a weekly government report on initial jobless claims, as well as industry data on pending home sales and business conditions in the Chicago area.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD retreating 0.42% to hit 1.2886, trading close to a fresh one-year low.
With most investors already away on year-end leave, trading volumes were thin, resulting in tight liquidity conditions and irregular volatility.
Market sentiment was hit after Italy’s Treasury sold just over EUR7 billion of long-term debt maturing between 2014 and 2022, below the maximum target of EUR8.5 billion.
The country sold EUR2.5 billion of 10-year bonds, maturing in March 2022, at an average yield of 6.97%, down from November's euro-record high 7.56%. The country also auctioned EUR2.5 billion of three-year bonds, at an average yield of 5.62%.
Following the auction, the yield on Italy’s 10-year bonds traded at 7.1%, above the critical 7% threshold widely seen as unsustainable in the long-term.
The sale was seen as the first test of European banks' willingness to purchase long-term sovereign debt of distressed euro zone countries, following last week’s nearly EUR500 billion cash infusion by the European Central Bank.
Investors were also cautious after the ECB said earlier that its overnight deposits receded to EUR436 billion, after hitting a record of EUR452 billion the previous day, underscoring European banks’ nervousness to lend to each other.
The greenback was also higher against the pound, with GBP/USD dropping 0.34% to hit 1.5405.
Elsewhere, the greenback was lower against the yen and but higher against the Swiss franc, with USD/JPY retreating 0.21% to hit 77.77 and USD/CHF climbing 0.21% to hit 0.9460.
The greenback was moderately lower against its Canadian but higher against its Australian and New Zealand cousins, with USD/CAD declining 0.16% to hit 1.0228, AUD/USD sliding 0.25% to hit 1.0067 and NZD/USD falling 0.28% to hit 0.7667.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.35% to hit 81.19.
Later in the day, the U.S. was to release a weekly government report on initial jobless claims, as well as industry data on pending home sales and business conditions in the Chicago area.