Investing.com - The euro traded close to a one-year low against the U.S. dollar on Thursday, and hit a fresh ten-year low against the yen after a disappointing Italian government bond auction prompted investors to flock to safer assets.
During European early afternoon trade, the euro was lower against the U.S. dollar, with EUR/USD retreating 0.29%, to hit 1.2899.
With most investors already away on year-end leave, trading volumes were thin, resulting in tight liquidity conditions and irregular volatility.
Italy’s Treasury sold just over EUR7 billion of long-term debt maturing between 2014 and 2022, below the maximum target of EUR8.5 billion.
The country sold EUR2.5 billion of 10-year bonds, maturing in March 2022, at an average yield of 6.97%, down from November's euro-record high 7.56%. The country also auctioned EUR2.5 billion of three-year bonds, at an average yield of 5.62%.
Following the auction, the yield on Italy’s 10-year bonds traded at 7.1%, above the critical 7% threshold widely seen as unsustainable in the long-term.
The auction was seen as the first test of European banks' willingness to purchase long-term sovereign debt of distressed euro zone countries, following last week’s nearly EUR500 billion cash infusion by the European Central Bank.
Meanwhile, markets were also jittery as overnight deposits at the ECB receded to EUR436 billion, after hitting a record of EUR452 billion the previous day, underscoring European banks’ nervousness to lend to each other.
The euro was higher against the pound, with EUR/GBP adding 0.13% to hit 0.8383.
The single currency was lower against the yen and the Swiss franc, with EUR/JPY retreating 0.44% to hit 100.40 and EUR/CHF slipping 0.11% to hit 1.2186.
Elsewhere, the euro was lower against the Canadian, Australian and New Zealand dollars and flat against the Australian dollar, with EUR/CAD declining 0.37% to hit 1.3208, EUR/AUD inching down 0.05%, to hit 1.2814 and EUR/NZD easing 0.08% to hit 1.6818.
During European early afternoon trade, the euro was lower against the U.S. dollar, with EUR/USD retreating 0.29%, to hit 1.2899.
With most investors already away on year-end leave, trading volumes were thin, resulting in tight liquidity conditions and irregular volatility.
Italy’s Treasury sold just over EUR7 billion of long-term debt maturing between 2014 and 2022, below the maximum target of EUR8.5 billion.
The country sold EUR2.5 billion of 10-year bonds, maturing in March 2022, at an average yield of 6.97%, down from November's euro-record high 7.56%. The country also auctioned EUR2.5 billion of three-year bonds, at an average yield of 5.62%.
Following the auction, the yield on Italy’s 10-year bonds traded at 7.1%, above the critical 7% threshold widely seen as unsustainable in the long-term.
The auction was seen as the first test of European banks' willingness to purchase long-term sovereign debt of distressed euro zone countries, following last week’s nearly EUR500 billion cash infusion by the European Central Bank.
Meanwhile, markets were also jittery as overnight deposits at the ECB receded to EUR436 billion, after hitting a record of EUR452 billion the previous day, underscoring European banks’ nervousness to lend to each other.
The euro was higher against the pound, with EUR/GBP adding 0.13% to hit 0.8383.
The single currency was lower against the yen and the Swiss franc, with EUR/JPY retreating 0.44% to hit 100.40 and EUR/CHF slipping 0.11% to hit 1.2186.
Elsewhere, the euro was lower against the Canadian, Australian and New Zealand dollars and flat against the Australian dollar, with EUR/CAD declining 0.37% to hit 1.3208, EUR/AUD inching down 0.05%, to hit 1.2814 and EUR/NZD easing 0.08% to hit 1.6818.