The euro sharply dropped yesterday with markets in a risk-off mood in poor year-end liquidity. Italian bond auctions were successful yesterday. Investors are now waiting to see the result of today’s auction of a sale of up to 8.5 billion euro of Italian bonds. Versus the greenback, the single currency broke below the 1.29 level falling to near a one-year low at 1.2887 from 1.3079. Against the Japanese yen, the single currency hit a ten-year low as selling from Japanese retail investors and exporters weighed on the euro in a low liquid year-end market.
The US dollar rose against a basket of currencies in thin post-Christmas trading. Versus the Japanese yen, the greenback traded as high as 78.03 from 77.56 and today the pair surrendered some of its gains to trade as low as 77.67. Economic data disappointed investors after the Swiss KOF Indicator fell to 0.01, much lower than expectations, adding on fears that the economy in Switzerland is deteriorating. Versus the Swiss franc, the greenback jumped as high as 0.9452 from 0.9320. Focus turns to Initial Jobless Claims, Purchasing Managers’ Index and Pending Home Sales expected later today.
The Australian dollar slid to a one-week low versus the greenback at 1.0044 from 1.0202. The Aussie which followed the decline in the euro remains vulnerable in thin year-end conditions ahead of today’s Italian bond auction.
Oil prices fell to 98.81 yesterday dollars a barrel after a surge above 100 dollars a barrel on concerns about possible supply disruptions due to rising Middle East tensions. Gold dipped to 1543.60 dollars an ounce from 1592.90. Silver edged lower to 26.71 dollars an ounce from 28.77.
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