By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — The euro trudged lower against the dollar Thursday, extending its recent softness as focus turned to a French sovereign-bond auction slated for later in the day.
In the East Asian afternoon, the euro EURUSD -0.47% sat at $1.2914, down from $1.2939 late Wednesday in North America, and extending the currency’s fall below the $1.30 handle. See report on Wednesday’s currencies action.
The moves came as France prepared to sell €7 billion to €8 billion in long-dated securities, a day after Germany managed to push yields down on its 10-year bunds. See report on European bond auction.
RBC Capital Markets said the French issue “is little more than a drop in the €220 billion-€230 billion issuance ocean” slated for the current quarter, and that weak demand could hurt the euro.
“An acceptable result may offer some support to the euro, but a poor result as we stare down a deluge of first-quarter supply (with more [sovereign credit] rating actions still to come) would likely prompt renewed euro weakness,” the RBC analysts said in a note Thursday.
The fall in the European currency came as the dollar firmed modestly, with the dollar index DXY +0.15% — a measure of the greenback against six rival units — edging up to 80.207 from 80.119 late Wednesday.
The Japanese yen USDJPY +0.11% saw little movement, with the dollar at ¥76.74, barely changed from late Wednesday’s ¥76.73.
The British pound GBPUSD -0.20% lost ground to $1.5587, down from $1.5612.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
