High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/a74cf658-19b6-11e1-ba5d-00144feabdc0.html#ixzz1f08C4xTJ
Improved market sentiment left the dollar and yen flagging after several sessions in the ascendancy.
The rise in risk sentiment came amid hopes for eurozone treaty changes that would allow weightier bond purchases by the European Central Bank, while rumours the International Monetary Fund was to offer aid to Italy, even though later denied by the IMF, also helped.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/a74cf658-19b6-11e1-ba5d-00144feabdc0.html#ixzz1f08DKchA
Meanwhile, periphery bond yields began to fall sharply - although critically, the Italian yield curve remained inverted with 10-, five- and two-year yields all above 7 per cent, a level seen as unsustainable.
The euro climbed 0.4 per cent to $1.3374 versus the dollar after losing 2 per cent during last week. Against the yen, the euro climbed 0.6 per cent to Y103.90.
Kathleen Brooks at Forex.com said: “The eurozone is reaching boiling point and the decisions made in the next two weeks will determine the survival or collapse of the euro and the eurozone project in the medium-term.”
The biggest winners on the improvement in risk appetite were emerging market and commodity currencies. As metals prices and other raw materials rose on commodity exchanges, the Australian dollar climbed 1.1 per cent to $0.9925 against the US dollar and rose 1.6 per cent to Y77.10 versus the yen.
A climb of more than $2 a barrel for crude oil prices helped lift the Norwegian krone 1.2 per cent to NKr5.8602 against the dolar. As gold prices also rose strongly, the South African rand jumped 1.4 per cent on the dollar to R8.3575.
Among the emerging market currencies, the Korean won climbed 1 per cent to Won1,151.01 and the Singapore dollar added 0.9 per cent to S$1.2992 against its US counterpart.
Ahead of Tuesday’s Autumn Statement report from the UK Treasury the pound gained 0.6 per cent to $1.5574 against the dollar and was 0.2 per cent higher versus the euro at £0.8583.
