By Riva Froymovich Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The dollar suffered knee-jerk losses against the euro and yen after the results of a closely watched Treasury auction Thursday afternoon. However, currency analysts say the swift moves were tied to market noise more than an actual interpretation of the auction. "The market is frankly confused in terms of how to trade the auctions on a consistent basis," said Alan Ruskin, head of international strategy at RBS in Greenwich, Conn. Currencies have since reverted close to pre-auction result levels and the overall theme of the day - recovering risk appetite with higher stocks - remains the driving factor leading the higher-yielding euro up against the dollar and the dollar higher against the safe-haven yen. Recently in New York, the euro was at $1.4079 from $1.4034 late Wednesday. It was also at Y134.83 from Y133.27, according to EBS. The dollar was at Y95.75 from Y95.01, and was at CHF1.0874 from CHF1.0878 Wednesday. The U.K. pound was at $1.6495 from $1.6367. The auction of seven-year notes drew the most interest from large institutional investors, including foreign central banks, of the three note sales this week. This demand, known as the "indirect bid", accounted for a robust 62.5% of the offering. In response, the euro spiked against the dollar with U.S. stocks on the notion that this supported risk appetite. However, this is kind of counterintuitive. The better the auction, the easier the U.S. will be able to finance its deficit, protecting the value of the dollar. "It's not a surprise that there is no follow through because the logic is convoluted," said Ruskin. "Good auctions should be good for the dollar." The yen's immediate move higher against the euro and dollar has also since lost steam as higher stocks and crude prices are bolstering riskier currencies, and have been throughout most of the New York session. -By Riva Froymovich, Dow Jones Newswires; 212-416-2217; riva.froymovich@dowjones.com

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