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Forex - Euro grinds higher after Spain, France debt auctions

Published 01/19/2012, 05:57 AM
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Investing.com - The euro ground higher against the U.S. dollar and the yen on Thursday, after auctions of Spanish and French government encountered solid investor demand, but uncertainty over Greek debt talks and comments from Fitch’s curbed gains.

During European late morning trade, the euro was higher against the U.S. dollar, with EUR/USD up 0.24% to hit 1.2897.

Spain auctioned more than the targeted amount of EUR4.5 billion, selling EUR6.6 billion of bonds.

The yield on the four-year bond was 4%, up from 3.9% at the last auction, while yields on the nine and 10-year bond were lower, at 4.5%, down from 5.1% at the previous auction, and 5.4% respectively, against 6.98% in December.

Despite the solid results, the yield on Spanish 10-year bonds climbed after the auction, rising to 5.28% from 5.18% earlier.

France sold EUR8 billion of medium and long term government debt, after Standard & Poor’s downgraded its triple-A rating last week

Meanwhile, Fitch’s said that it expected its ratings review of six euro zone countries would result in downgrades of one to two notches in most cases. The review is set to be completed at the end of January.

Elsewhere, talks between Greek Prime Minister Lucas Papademos and the country’s creditors continued, after breaking down last week amid disagreements over how much money investors will lose by swapping their bonds.

The shared currency was also up against the pound and the safe haven yen, with EUR/GBP adding 0.19% to hit 0.8348 and EUR/JPY easing up 0.10% to hit 98.93.

Elsewhere, the euro inched lower against the Swiss franc, with EUR/CHF dipping 0.06% to hit 1.2077.

The euro pulled away from recent record lows against the Australian and New Zealand dollars, with EUR/AUD rising 0.47% to hit 1.2383 and EUR/NZD climbing 0.53% to hit 1.6081.

A report earlier showed that Australia's economy lost 29,300 jobs in December, confounding expectations for a gain of 10,000. The country’s unemployment rate held steady at 5.2%.

A separate report showed that consumer price inflation in New Zealand fell unexpectedly in the fourth quarter.

The euro was almost unchanged against the Canadian dollar, with EUR/CAD inching up 0.02% to hit 1.3009.

Later Thursday, the U.S. was to publish official data on building reports and housing starts as well as a report on consumer price inflation. The country was also to release government data on unemployment claims and a separate report on manufacturing activity in the Philadelphia area.  


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