BLBG:Euro Snaps Biggest Gain in Three Weeks Before Debt Sales; Aussie Declines
The euro halted gains after rising the most in almost three weeks versus the dollar yesterday as Spain and France prepared to sell bonds amid concern Europe’s debt crisis will boost borrowing costs for the two nations.
The Dollar Index snapped a three-day decline as European shares fell, reviving demand for the relative safety of the U.S. currency. Australia’s dollar weakened after government data showed building approvals dropped and consumer spending slowed, fueling speculation the central bank will cut interest rates.
“Europe’s debt problem still exists, and the euro is vulnerable to selling when it rebounds,” said Takuya Kawabata, a researcher in Tokyo at Gaitame.com Research Institute Ltd., a unit of Japan’s largest foreign-exchange margin company. “Bond yields may rise at auctions today in Spain and France.”
The euro fell 0.1 percent to $1.3436 at 8:52 a.m. in London after surging 1 percent yesterday, the biggest gain since Nov. 11. The shared currency was little changed at 104.35 yen from yesterday when it climbed 0.6 percent. The yen dropped 0.1 percent to 77.66 per dollar.
IntercontinentalExchange Inc.’s Dollar Index (DXY), which tracks the U.S. currency against those of six major U.S. trading partners, gained 0.1 percent to 78.455.
Spain will sell as much as 3.75 billion euros of debt maturing in 2015, 2016 and 2017. France will offer bonds maturing in 2017, 2021, 2026 and 2041.
Australia’s dollar fell against all its major counterparts after the statistics bureau said the number of permits granted to build or renovate houses and apartments declined 10.7 percent in October after dropping 14.2 percent the previous month. Growth in retail sales slowed to 0.2 percent from 0.4 percent.
The Australian currency weakened 1.2 percent to $1.0160, and slid 1.2 percent to 79.89 yen.
To contact the reporters on this story: Keith Jenkins in London at Kjenkins3@bloomberg.net; Kristine Aquino in Singapore at kaquino1@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
