Reuters: US Dollar Report: FOREX-Euro, commodity currencies pressured; China data eyed

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

FOREX-Euro, commodity currencies pressured; China data eyed Apr 4th 2012, 23:46 Wed Apr 4, 2012 7:46pm EDT * Poor Spanish bond auction spooks markets * ECB no help as dovish to some, hawkish to others * HSBC's China services PMI report next in focus By Ian Chua SYDNEY, April 5 (Reuters) - The euro floundered at three-week lows versus the yen and dollar on Thursday, while commodity currencies also nursed heavy losses after a poor Spanish bond auction reignited worries about the euro zone debt crisis. Having fallen nearly 1 percent towards $1.3100, the euro last stood at $1.3142. Support is seen around $1.3094, the 76.4 percent retracement of the mid-to-late March rise. Having failed to clear $1.3400 the market now seems keen to test the floor of a two-month range around $1.3000. Against the yen, it was at 108.31, not far off an overnight trough around 107.90. Not helping the common currency, the European Central Bank chief dismissed a German-led push to start planning to unwind emergency crisis-fighting measures, while also stressing a need to keep a close eye on price pressure. Some market players interpreted the comments as dovish, while others saw it as having a hawkish slant. Ultimately, traders said it was the Spanish debt sale that soured sentiment. "Weaker Spanish auctions on Wednesday provide a reminder that markets are not convinced that peripheral stress has completely abated," BNP Paribas wrote in a client note. "Thus, with concerns over Spain peaking through and political risk ever more apparent with the upcoming French and Greek elections ahead, we reiterate our EURUSD forecast of 1.28 by end of Q2." Spanish borrowing costs jumped at a bond auction on Wednesday as this week's tough budget failed to calm investors' nerves about the country's finances. Traders in Asia are likely to remain cautious ahead of HSBC's survey on China's services sector due at 0230 GMT. Another disappointing report would only serve to bolster fears about a hard landing in the world's second biggest economy. The U.S. dollar and yen benefited from renewed risk aversion, with the greenback further supported by diminishing hopes of more stimulus from the Fed. A top Fed official said on Wednesday a stronger jobs market and slightly higher-than-expected inflation have lengthened the odds the Fed will need to embark on a third round of bond buying to boost the economy. The dollar index touched a two-week high of 79.922, before giving back a bit of ground to 79.752. That saw the Aussie retreat to a near three-month low of $1.0245. It last stood at $1.0277, keeping intact support at $1.0260, the 50 percent retracement of the November-February rally. The Aussie has been knocked lower by soft patch of local data, fears about a hard landing in China and expectations for a rate cut next month. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions