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Forex - Dollar mixed to lower in subdued trade

Published 12/28/2011, 04:47 AM
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Investing.com - The U.S. dollar was mixed to lower against its major counterparts in subdued year-end trade on Wednesday, as markets turned to a series of highly anticipated Italian bond auctions later in the day.

During European morning trade, the dollar was flat against the euro, trading within striking distance of an eleven-month low.

With most investors already away on year-end leave, trading volumes were low, resulting in subdued trade.

Italy was scheduled to sell EUR9 billion euros of 179-day bills and EUR2.5 billion euros of zero-coupon 2013 securities later Wednesday.

Ahead of the auctions, markets were jittery as the yield on Italy’s ten-year bonds remained close to the 7% threshold, a level widely considered unsustainable and above which other euro zone governments had been forced to seek bailouts.

The greenback was moderately higher against the pound, with GBP/USD slipping 0.01% to hit 1.5667.

The greenback was lower against the yen and the Swiss franc, with USD/JPY retreating 0.17% to hit 77.74 and USD/CHF easing 0.02% to hit 0.9338.

Earlier Wednesday, preliminary data showed that industrial production in Japan fell more-than-expected in November, tumbling 2.6% after a 2.2% rise the previous month.

Separate reports showed that Japan’s retail sales declined more-than-expected in November, falling 2.3%, while household spending slumped far more-than-expected by 3.2% in December.

Meanwhile, Japan’s government said it will not change its stance on taking appropriate action in the foreign exchange market as needed.

The greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD declining 0.09% to hit 1.0177, AUD/USD climbing 0.18% to hit 1.0174 and NZD/USD advancing 0.37% to hit 0.7758.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched 0.02% lower to hit 80.13.


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