FX:Dollar mixed after weak Spanish auction, U.S. data ahead
Forexpros - The U.S. dollar was mixed against the other major currencies on Thursday, following a weak Spanish bond auction, which saw the country’s borrowing costs rise sharply and demand drop, fuelling concerns that the country could be locked out of debt markets.
During European morning trade, the dollar was higher against the euro, with EUR/USD down 0.11% to 1.2268.
Spain’s Treasury auctioned EUR2.9 billion of two, five and seven-year government bonds, but the yield on the country’s five-year bonds climbed to 6.45% from 6.07% at a similar auction last month, while the yield on the seven year bond jumped to 6.79% from 4.89% in February.
Following the auction the yield on the country’s 10-year bonds was at 7.02%, breaching the critical 7% threshold, widely viewed as unsustainable in the long run.
But the dollar remained under pressure after Federal Reserve Chairman Ben Bernanke said the U.S. central bank was prepared to take further action to support the economy if the jobs market failed to show improvement in a second day of testimony on Wednesday, but failed to explicitly indicate if additional stimulus measures are imminent.
The greenback was little changed against the pound, with GBP/USD inching up 0.02% to hit 1.5655.
In the U.K., official data showed that retail rose less-than-expected in June, inching up 0.1% in May, below expectations for a 0.6% gain, as wet weather hurt demand for outdoor products.
Elsewhere, the greenback was lower against the yen, with USD/JPY down 0.21% to 78.63, but edged higher against the Swiss franc, with USD/CHF up 0.08% to 0.9785.
The greenback was broadly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.10% to trade at 1.0091, AUD/USD rising 0.47% to 1.0410 and NZD/USD up 0.30% to hit 0.8025.
Sentiment on the growth linked dollars was boosted by stronger-than-expected corporate earnings and rising commodity prices.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.05% to 83.05.
Later Thursday, the U.S. was to publish government data on initial jobless claims, as well as reports on existing home sales and manufacturing activity in Philadelphia.
