MW:Euro-dollar range-bound before Italy auction, SNB
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — The euro moved in a range against the U.S. dollar in Asian afternoon trading Thursday, as cautious investors looked ahead to an Italian debt auction and the Swiss National Bank’s monetary policy meeting later in the day.
The common currency EURUSD +0.20% was buying $1.2563 from $1.2588 earlier in the day, and from $1.2579 in North American trade on Wednesday.
The ICE dollar index DXY -0.05% , a measure of the greenback against a basket of six major global currencies, was at 82.148, also coming off the day’s lows to trade little changed from 82.126 on Wednesday.
“Deteriorating news flow ahead of Sunday’s Greek elections should re-emerge today to limit [euro-dollar] strength,” Credit Agricole strategists Adam Myers and Simon Smollett wrote to clients in a note.
“While we concede that selling [euro] ahead of political inflexion points in thin markets is not for the faint-hearted, investors should garner some relief for the fact that the [euro-dollar] downtrend remains intact,” they added.
The range-bound moves were made ahead of Italy’s auction of €4.5 billion ($5.62 billion) in medium- and long-term debt due later in the day. The auction comes amid speculation that the government in Rome may also be in line for a financial bailout. Read full story on Italy’s auction.
Late Wednesday, Moody’s cut the sovereign credit ratings of Spain and Cyprus, keeping both on review for further possible downgrades.
Among other major currency pairs, the British pound GBPUSD -0.02% dropped to $1.5488 versus $1.5522, while the dollar USDJPY -0.10% was changing hands at 79.388 Japanese yen, from ¥79.35.
Against the Swiss currency, the dollar USDCHF -0.20% was trading at 0.9560 Swiss francs, up from 0.9548 francs overnight in U.S. trading, while the euro EURCHF +0.00% was buying 1.2015 Swiss francs compared with 1.2007 francs.
Those moves ahead of the Swiss National Bank’s monetary policy meeting later in the day. The central bank is expected to leave interest rates and the floor for the euro-swiss pair untouched.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
