Forex - Euro slips lower as Greece talks drag

Published 02/02/2012, 06:30 AM
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Investing.com - The euro slipped lower against its major counterparts on Thursday, as investors remained jittery in the absence of an announcement on a debt restructuring deal for Greece.

During European late morning trade, the euro was lower against the U.S. dollar, with EUR/USD slipping 0.19% to hit 1.3135.

Earlier this week, European officials indicated that negotiations with Greece’s private creditors on a debt writedown are almost concluded, but the second bailout and any public sector involvement must also be agreed upon before a deal can be announced.

Meanwhile, Spain’s Treasury auctioned EUR4.5 billion of medium term debt earlier, at much lower yields than previously.

Investors purchased EUR2.52 billion of three-year bonds at a yield of 2.8%, down from 3.38% in January and EUR1.05 billion of five-year bonds at a yield of 3.5%, compared to 5.5% last month.

France auctioned EUR8 billion of government debt in an auction which met with solid investor demand and lower yields.

Also Thursday, official data showed that producer price inflation in the euro zone fell in December, declining 0.2% after rising by 0.2% in November.

Year-over-year, PPI rose at a rate of 4.3% in December, in line with expectations, after advancing at a rate of 5.4% in November.

The euro was also weaker against the pound, with EUR/GBP slipping 0.17% to hit 0.8303.

In the U.K., data showed that the construction sector expanded in January, albeit at a weaker-than-forecast pace, as growth in new orders slowed and some existing contracts were completed.

The single currency was down against the yen, with EUR/JPY shedding 0.27% to hit 100.03.

In contrast, the euro inched higher against the Swiss franc, with EUR/CHF easing up 0.09% to hit 1.2055.

Elsewhere, the euro was trading close to a recent record low against the Australian dollar and touched a fresh record low against the New Zealand dollar, with EUR/AUD slipping 0.16% to hit 1.2274 and EUR/NZD sliding 0.16% to hit 1.5779.

The Australian dollar was boosted earlier after the country posted a larger-than-expected AUD1.71 billion trade surplus in December, beating expectations for a surplus of AUD1.2 billion.

In addition, the euro was lower against the Canadian dollar, with EUR/CAD losing 0.10% to hit 1.3127.

Later in the day, Federal Reserve Chairman Ben Bernanke was to testify before the House of Representatives budget committee. The U.S. was also to produce government data on initial jobless claims.


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