BLBG:Euro Reaches Two-Week High Before Spanish, French Auction; Aussie Weakens
The euro reached a two-week high against the dollar as Spain prepared to sell debt in a test of investor sentiment that has seen demand increase and borrowing costs fall so far this year.
Europe’s shared currency held two days of gains versus the greenback as the Greek government began a second day of talks with private creditors in a push to reach an accord to slash the nation’s debt. Australia’s dollar weakened for the first time in three days after a government report showed employers unexpectedly cut workers in December.
“The main thing today is the auctions, particularly the Spanish ones, after the really successful auction last week,” said Chris Walker, a foreign-exchange strategist at UBS AG in London. “The auction should go OK because the size is quite small. There’s a positive tone in the market, which means that if we get average or strong auctions then the euro could be quite well rewarded.”
The euro rose 0.1 percent to $1.2875 at 9:22 a.m. London time after climbing to $1.2894, the strongest since Jan. 5. The common currency was little changed at 98.83 yen. The dollar fell 0.1 percent to 76.75 yen.
The Spanish Treasury plans to sell as much as 4.5 billion euros of notes and bonds maturing in 2016, 2019 and 2022 today after exceeding its maximum targets in bond auctions since Dec. 13. France will also offer notes today.
The euro has declined 3.6 percent in the past six months, according to Bloomberg Correlation-Weighted Indexes. The yen has advanced 8.6 percent over the same period and the dollar has risen 6.6 percent.
Aussie Falls
The Australian dollar weakened against all of its 16 major counterparts after the statistics bureau said the number of people employed dropped by 29,300 in December. Economists had estimated an increase of 10,000.
“The knee-jerk reaction was to take the Aussie dollar lower,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “We’ll probably need to see a weakish looking CPI number next week to really make the case for a cut from the RBA.”
Australia’s dollar dropped 0.4 percent to $1.0394, and fell 0.5 percent to 79.75 yen.
To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net.
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
