Euro below $1.29; yields fall as Italy sells government bonds
By William L. Watts and Michael Kitchen, MarketWatch
FRANKFURT (MarketWatch) — The dollar gained on the euro Thursday, while the 17-nation shared currency remained under pressure versus the Japanese yen after Italy saw borrowing costs fall back from euro-era highs in its final bond auction of 2011.
The euro changed hands at $1.2887 EURUSD -0.46% , down from $1.2938 in late North American trading Wednesday, and slipped 0.2% to trade at 1.2882 yen EURJPY -0.68% .
Risk-oriented currencies failed to find support after Italian authorities sold a total of 7.01 billion euros of various government bonds, falling short of the top of a target range of €8.5 billion.
The yield in an auction of 10-year bonds dropped to 6.98% from a euro-era high well above 7% in an auction in November.
“Overall today’s Italian auction data show that the world’s third-largest bond market remains under stress but may be slowly receding from the panic levels recorded in November,” said Boris Schlossberg, director of currency research at GFT.
A pickup in risk appetite in early U.S. trading could help trigger a short-covering rally, Schlossberg said, but he warned that foreign-exchange bears could exert fresh pressure if equities turn negative.
U.S. economic data on tap for Thursday include weekly jobless claims at 8:30 a.m. Eastern, followed by the Chicago region purchasing managers index and data on pending home sales.
Overall, the U.S. dollar was higher, with the dollar index DXY +0.21% — a measure of the currency against six rival units — standing lately at 80.743, up from 80.526 late Wednesday.
The British pound GBPUSD -0.37% fell to $1.5371 from $1.5455.
Against the yen, the dollar USDJPY -0.22% slipped to ÂĄ77.77 from ÂĄ77.95.
William L. Watts is a reporter for MarketWatch in Frankfurt.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
