Euro broadly lower amid sustained Spain concerns

Published 09/19/2012, 06:11 AM
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Investing.com - The euro was broadly lower against the other major currencies in light trade on Wednesday, as uncertainty over whether Spain is about to ask for more financial aid continued to weigh on market sentiment.

During European early afternoon trade, the euro was lower against the U.S. dollar, with EUR/USD falling 0.24% to 1.3017.

Sentiment on the euro remained vulnerable amid reports Spanish Prime Minister Mariano Rajoy is uncertain about asking for help from the European Central Bank's new bond-purchasing program, which would mean signing up to a permanent bailout fund.

On Tuesday, Spain's Deputy Prime Minister said the country was still considering the conditions of a possible bailout.

Investors were also cautious as the yield on Spain's 10-year government bonds was hovering at 5.89%, close to the 6% threshold, widely seen as unsustainable in the long term.

The single currency was also lower gainst the pound, with EUR/GBP edging down 0.10% to 0.8024.

The minutes of the Bank of England's August meeting showed earlier that policymakers voted 9 to zero in favor of leaving U.K. interest rates unchanged at 0.5% and also agreed to leave the quantitative easing program unchanged at GBP375 billion.

The euro was lower against the yen and the Swiss franc, with EUR/JPY dipping 0.09% to 102.74, EUR/CHF slipping 0.26% to 1.2085.

Earlier in the day, the Bank of Japan boosted the size of its monthly bond purchases by JPY10 trillion to a total of JPY80 trillion and left its policy interest-rate target unchanged in the current range of zero to 0.1%.

Meanwhile, the ZEW Centre for Economic Research said that its index of economic expectations for Switzerland dropped unexpectedly to minus 34.9 in August from a reading of minus 33.3 the previous month.

The shared currency was lower against the Australian, New Zealand and Canadian dollars, with EUR/AUD slipping 0.08% to 1.2468, EUR/NZD retreating 0.17% to 1.5745 and EUR/CAD declining 0.29% to trade at 1.2675.

Official data showed earlier that New Zealand's current account deficit widened more-than-expected in the second quarter, falling to NZD180 billion from a deficit of NZD1.07 billion in the previous quarter.

Later in the day, the U.S. was to publish official data on building permits and on housing starts, followed by government data on crude oil stockpiles, as well as an industry report on existing home sales.


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