Forex - Dollar lower vs. rivals as risk sentiment recovers

Published 01/12/2012, 08:02 AM
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Investing.com - The U.S. dollar was lower against its major counterparts on Thursday, as well-received Spanish and Italian bond auctions eased concerns over sovereign funding in the single currency bloc.

During European afternoon trade, the dollar was lower against the euro, with EUR/USD gaining 0.37% to hit 1.2754.

Spain sold twice the maximum targeted amount of EUR5 billion at auction, selling EUR9.98 billion in bonds maturing in 2015 and 2016, including a new benchmark bond.

The yield on the new benchmark bond, which matures in July 2015, was 3.38%, compared with 5.18% at a similar auction in December.

Italy auctioned EUR12 billion in short-term debt with yields on five-month bonds at 1.6%, down from 3.25% in December and the yield on 12-month bills falling to 2.73% from 5.95% last month.

Meanwhile, the European Central Bank left its key benchmark interest rate unchanged at 1.00% earlier, after cutting rates in the previous two consecutive meetings.

The greenback was also lower against the pound, with GBP/USD advancing 0.11% to hit 1.5347.

The Bank of England held its benchmark interest rate at a record-low 0.50%, where it’s stood since March 2009, in a widely expected move.

The bank also kept the stock of asset purchases financed by the issuance of central bank reserves at GBP275 billion.

The announcement came after official data showed that manufacturing production in the U.K. fell unexpectedly in November, while industrial production also declined unexpectedly.

Elsewhere, the greenback was steady against the yen but lower against the Swiss franc, with USD/JPY easing up 0.01% to hit 76.87 and USD/CHF losing 0.43% to hit 0.9500.

In Switzerland, Finance Minister Eveline Widmer-Schlumpf said earlier that a permanent successor to Philipp Hildebrand as central bank chairman may not be designated for several months.

The greenback was lower against its counterparts in Canada, Australia and New Zealand, with USD/CAD slipping 0.35% to hit 1.0157 AUD/USD climbing 0.50% to hit 1.0362 and NZD/USD easing up 0.03% to hit 0.7972.

Earlier in the day, official data showed that Chinese consumer price inflation eased to 4.1% in December, its lowest level in 15 months, down from 4.2% the previous month, supporting the view that Beijing may ease monetary policy to bolster growth.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.29% to hit 81.35.

Later Thursday, the U.S. was to release official data on retail sales and initial jobless claims.


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