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Forex - Dollar steady as Spanish debt sale, ECB in focus

Published 01/12/2012, 04:43 AM
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Investing.com - The U.S. dollar was steady against all of its major counterparts on Thursday, as investors awaited the results of Spanish government debt auction that was being viewed as a key test of confidence in the ability of troubled euro zone states to meet their sovereign funding requirements.

During European morning trade, the dollar was marginally lower against the euro, with EUR/USD easing up 0.10% to hit 1.2719.

Sentiment on the single currency remained fragile as Spain prepared to offer up to EUR5 billion of government bonds maturing in 2015 and 2016, a day before Italy was due to auction as much as EUR4.75 billion of five-year bonds.

Markets were also jittery ahead of the European Central Bank’s policy setting meeting later Thursday. The ECB was expected to keep rates unchanged at 1% and was expected to reiterate that governments in the euro zone must step up efforts to tackle the region’s debt crisis.

But the greenback was higher against the pound, with GBP/USD shedding 0.19% to hit 1.5302.

The pound slipped 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 higher against the yen but slid against the Swiss franc, with USD/JPY easing up 0.12% to hit 76.95 and USD/CHF losing 0.16% to hit 0.9524.

The Bank of Japan’s chief economist said earlier that the country’s economy will see flat growth for the time being before resuming a moderate recovery later this year as the euro zone’s debt crisis and an overseas slowdown weigh on exports.

The greenback was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD slipping 0.11% to hit 1.0182, AUD/USD dipping 0.02% to hit 1.0308 and NZD/USD sliding 0.15% to hit 0.7958.

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, slid 0.11% to hit 81.49.

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



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