Reuters: US Dollar Report: FOREX-Euro firms versus dollar, Australian dollar shines

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 firms versus dollar, Australian dollar shines Jul 19th 2012, 12:27 Thu Jul 19, 2012 8:27am EDT * Euro firms vs dollar but hits record low vs Aussie dollar * Yields rise at Spanish bond sale * German vote due later on Berlin's contribution to Spain aid * Equities rise, helping riskier currencies By Michael Szabo LONDON, July 19 (Reuters) - The euro edged up against the dollar on Thursday but fell to a record low against the Australian dollar, with gains in equities buoying demand for riskier and higher-yielding currencies. Spain earlier sold 3 billion euros in debt at a cost of higher borrowing costs than previous auctions, reminding investors of the funding and economic problems facing Spain. However, a German parliamentary vote was due later Thursday on approving Berlin's contribution to an aid package for Spanish banks. It was expected to be passed, which analysts said could give the euro a small boost. The euro was up 0.1 percent against the dollar at $1.2295, having earlier hit a one-week high of $1.2325. It was helped by upbeat earnings lifting European stocks to an 11-week high. But it fell 0.2 percent against the yen to 96.55 yen and hit a record low of A$1.1780 against the higher-yielding Australian dollar, as well as hitting a 3-1/2 year low against the UK pound. "The theme is one of carry plays because there is so much excess money out there that people are looking to get any sort of return on their investment, whether in bonds or in equities," said Ankita Dudani, currency strategist at RBS. The euro erased earlier gains on a Dow Jones report which quoted a draft memorandum of understanding as saying Europe's Financial Stability Facility, the EU's bailout fund, would be able to buy Spanish bonds on primary and secondary markets. However, the European Commission said the sum of up to 100 billion euros that the euro zone has agreed to lend to Spain is only for recapitalising the country's banks and not for any other possible use such as bond market intervention. "Markets are testing whether there is some further upside for the euro (against the dollar) ... but there are too few details (about the reported EFSF draft) at this point," Peter Wuyts, an analyst at KBC. "If the debate moves further in that direction it could be euro positive, but as long as we lack details these moves are technical and corrective in nature." Analysts expect the euro to retest a two-year low of $1.2162 hit last week because investors, discouraged by a lack of progress being made towards solving the euro zone debt crisis, continue to shun the currency in favour of safer havens. "At the moment, the risks might be a bit less than they were in the recent past, but we still see the current (euro) move as corrective, and as long as institutional issues are pending then the risk is for another down leg," KBC's Wuyts said. The higher-yielding Australian dollar rose broadly, hitting a 2-1/2 month high against the U.S. dollar of A$1.0440. Traders cited demand from Australian companies to buy the currency as well as talk of central banks looking to diversify their holdings into Australian assets. The U.S. dollar also fell to a six-week low against the yen of 78.477 yen, with investors preferring the Japanese currency due to the chance of more monetary easing in the U.S. This helped push the dollar to a two-week low against a basket of currencies, with the dollar index falling to 82.734. 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