Euro Drops Against Major Peers Before Spain Debt Auctions

The euro fell to less than .30 for the first time in two months as Spanish bond yields touched a 2012 high after a minister called on the European Central Bank to do more to stem debt-market turmoil.

The 17-nation currency dropped for a second day against the yen and reached the lowest since 2010 versus the pound. The yen strengthened against all of its 16 most-traded counterparts. China’s yuan weakened as the central bank widened the currency’s trading band. Higher-yielding currencies trimmed losses against the dollar after U.S. retail sales rose in March and yields on Spanish government securities pared increases.

“There’s still a hesitation with respect to trading in European bond markets,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. “The U.S. data was a little bit better than expected. It’s causing a minor risk-on rally.”

The euro fell 0.3 percent to .3040 at 9:59 a.m. in New York after dropping to .2995, the weakest since Feb. 16. The shared currency weakened 0.7 percent to 105.12 yen after declining 0.8 percent on April 13. The euro slipped 0.2 percent to 82.35 U.K. pence after reaching 82.10 pence, the lowest since September 2010. The yen rose 0.4 percent to 80.58 per dollar.

Source | Forex News Paper | http://forexnewspaper.blogspot.com/2012/04/euro-drops-against-major-peers-before.html

Euro Rises to Two-Week High on Spain Bailout Request

The euro rose against most of its major counterparts after European governments agreed to provide Spain with a bailout loan.

The 17-nation currency climbed to a two-week high after Spain asked for as much as 100 billion euros (6 billion) to save its banking system, making it the fourth member in the currency bloc to seek a rescue. The dollar and yen fell on decreased demand for refuge assets as Asian shares rallied.

The euro reached .2671, the highest since May 23, before trading at .2631 as of 1:36 p.m. in Tokyo, 0.9 percent higher than the June 8 close in New York. It jumped 1.1 percent to 100.59 yen. The dollar added 0.2 percent to 79.64 yen.

The MSCI Asia Pacific Index of shares advanced 1.8 percent.

Seven months after winning a landslide victory, Spanish Prime Minister Mariano Rajoy was forced to abandon his bid to recapitalize banks without external help. Foreign investors had cut holdings of the nation’s debt amid concern banks’ bad loans may overwhelm public finances, driving borrowing costs to near euro-era records.

Futures traders had increased their bearish bets on the euro to an unprecedented level, according to figures from the Washington-based Commodity Futures Trading Commission. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro, so-called net shorts, compared with those on a gain was 214,418 on June 5, the most on record going back to 1999.

“The growth outlook for most of the euro area is already bleak,” Guillermo Felices, head of European currency strategy in London at Barclays Plc, and Yuki Sakasai, a New York-based currency strategist, wrote in a research note. “One way to spur growth would be the ECB easing to weaken the euro. Otherwise, without growth, the euro will remain under pressure.”

Source | Forex News Paper | http://forexnewspaper.blogspot.com/2012/06/euro-rises-to-two-week-high-on-spain.html