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Euro steady as EU summit, U.S. data ahead

Published 10/18/2012, 07:33 AM
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Investing.com - The euro rose to a five-month high against the yen on Thursday and remained supported close to a one month high against the U.S. dollar as falling Spanish bond yields and optimism over the global growth outlook underpinned demand for the single currency.

During European early afternoon trade, the euro rose to its highest level since May against the yen, with EUR/JPY rising 0.25% to 103.22

Spain saw the yield on 10-year government bonds fall to the lowest level since April at an auction of government debt earlier in the day.

Spain’s Treasury sold EUR1.51 billion worth of ten-year government bonds at an average yield of 5.45%, down from 5.66% at a similar auction last month.

The yield on three-year bonds fell to 3.22% from 3.95% last month, while the yield on four-year bonds declined to 3.97% from 4.60% in September.

Investors remained cautious ahead of the start of a two-day European Union summit later in the day, although no major announcements on Spain or Greece were expected.

The yen remained under pressure amid speculation that the BoJ may further increase the size of its asset purchase program at its upcoming policy meeting on October 30.

The euro was hovering close to a one-month high against the U.S. dollar, with EUR/USD dipping 0.14% to 1.3100.

The single currency was trading close to a four-month high against the pound, with EUR/GBP dipping 0.05% to 0.8119.

Sterling found support after official data showed that U.K. retail sales rose by a seasonally adjusted 0.6% in September, beating expectations for a 0.4% gain, adding to hopes for a sustained economic recovery.

The euro was fractionally lower against the Swiss franc, with EUR/CHF inching down 0.07% to 1.2019.

The shared currency edged lower against the Australian, New Zealand and Canadian dollars, with EUR/AUD slipping 0.11% to 1.2621, EUR/NZD edging down 0.04% to 1.5955 and EUR/CAD sliding 0.09% to 1.2816.

Demand for the growth linked currencies remained well supported after official data showed that the Chinese economy expanded by 7.4% in the three months to October, matching economists’ forecasts.

Later Thursday, the U.S. was to publish its weekly report in initial jobless claims, as well as data on manufacturing activity in Philadelphia.



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