Euro falls to lowest since 2000 against Japanese yen
By Deborah Levine and William L. Watts, MarketWatch
NEW YORK (MarketWatch) — The dollar pared gains against the euro Thursday, which lingered near its lowest level in 11 years versus the Japanese yen, as Italy saw borrowing costs fall back from euro-era highs in its final bond auction of the year.
The euro EURUSD -0.22% fell to $1.2911, down from $1.2938 in late North American trading Wednesday. It touched $1.2857, its lowest level on a closing basis since September 2010, according to FactSet Research.
Against the Japanese yen, the shared currency EURJPY -0.40% slipped to 100.46 yen from ÂĄ100.83 late Wednesday.
The dollar index DXY +0.13% , a measure of the greenback against six major currencies, rose to 80.619, from 80.526.
For the year, the euro has declined 3.7% against the dollar and 2.8% versus the yen.
The dollar index has gained 2.1% in 2011.
“We see continued euro and gold selling for position adjustments, and possible hedge fund redemptions, said Andrew Busch, global currency and public policy strategist at BMO Capital Markets. “Most turn of the year funding pressures have eased, but back end pressure remains as the market continues to price in Euroggedon.”
The dollar pared gains slightly after a U.S. report showed first-time jobless claims rose more than expected to 381,000 in the latest week, though analysts noted the data series tends to be more volatile around year-end. See story on U.S. jobless claims.
“The data continues to point to a decent pace of job creation for December as the economy continues its revival process, said Andrew Wilkinson, chief economic strategist at Miller Tabak.
U.S. stocks opened with small gains, pushing the Standard & Poor’s 500 Index SPX +0.47% up 0.4%.
That could signal more willingness among investors to wade back into riskier assets and could help trigger a short-covering rally, said Boris Schlossberg, director of currency research at GFT. But he warned that foreign-exchange bears could exert fresh pressure if equities turn negative.
Italy’s last auction of 2011
During European trading hours, 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,” Schlossberg said.
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.
Among other major currencies, the British pound GBPUSD -0.25% fell to $1.5418 from $1.5455.
Against the yen, the dollar USDJPY -0.20% slipped to ÂĄ77.76 from ÂĄ77.95.
Deborah Levine is a MarketWatch reporter, based in New York.
William L. Watts is a reporter for MarketWatch in Frankfurt. Michael Kitchen in Los Angeles contributed to this report.
