2013-02-27 14:32:57 European Session – Euro falls after Italy bond auction pushes yields higher
February 27, 2013 2:32 pm
After a getting a brief boost against the dollar, the euro moved back lower towards a seven-week low after Italian bond yields rose at a debt auction on Wednesday. This bond sale comes at a critical time during which Italy has had an inconclusive election and raises concerns over the euro zone debt crisis.
EURUSD fell to $1.3076 after the Italian auction from a session high of $1.3120. Earlier in the day the euro was boosted after a survey showed euro zone economic and business confidence improved for a fourth straight month in February.
However, the single currency held above Tuesday’s low of $1.3017, which was its weakest since January 7, but the currency remains vulnerable to further losses as uneasy investors wait to see whether Italian politicians can form a coalition, or will call fresh elections. This may take time to agree on a coalition, if it ever happens, so until we get any sign of a new election uncertainty is going to continue to weigh on the euro.
US data on core durable goods came in much higher than forecast today, gave some help to lift the dollar.Against the Swiss franc, dollar jumped 0.14 percent to 0.9308 from 0.9295. USDCAD surged to 1.0269 from 1.0262.
Looking ahead to the US session, markets will focus on US Federal Reserve Chairman Ben Bernanke who is speaking again today, but this time in front of the House Financial Services Committee. Yesterday Bernanke gave his testimony to the US Congress and defended the Fed’s monetary stimulus measures and bond buying program. He is expected to reiterate his support for QE.
Loose monetary policy tends to weaken the dollar, which was kept under pressure after Bernanke’s speech yesterday. Against the yen, the greenback has consolidated losses since yesterday’s decline, trading in a tight range around 91.50 yen and moving to the downside.
After a getting a brief boost against the dollar, the euro moved back lower towards a seven-week low after Italian bond yields rose at a debt auction on Wednesday. This bond sale comes at a critical time during which Italy has had an inconclusive election and raises concerns over the euro zone debt crisis.
EURUSD fell to $1.3076 after the Italian auction from a session high of $1.3120. Earlier in the day the euro was boosted after a survey showed euro zone economic and business confidence improved for a fourth straight month in February.
However, the single currency held above Tuesday’s low of $1.3017, which was its weakest since January 7, but the currency remains vulnerable to further losses as uneasy investors wait to see whether Italian politicians can form a coalition, or will call fresh elections. This may take time to agree on a coalition, if it ever happens, so until we get any sign of a new election uncertainty is going to continue to weigh on the euro.
US data on core durable goods came in much higher than forecast today, gave some help to lift the dollar.Against the Swiss franc, dollar jumped 0.14 percent to 0.9308 from 0.9295. USDCAD surged to 1.0269 from 1.0262.
Looking ahead to the US session, markets will focus on US Federal Reserve Chairman Ben Bernanke who is speaking again today, but this time in front of the House Financial Services Committee. Yesterday Bernanke gave his testimony to the US Congress and defended the Fed’s monetary stimulus measures and bond buying program. He is expected to reiterate his support for QE.
Loose monetary policy tends to weaken the dollar, which was kept under pressure after Bernanke’s speech yesterday. Against the yen, the greenback has consolidated losses since yesterday’s decline, trading in a tight range around 91.50 yen and moving to the downside.
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