The Euro witnessed a slight correction in overnight market versus the greenback on successful auction of Portuguese bonds on Wednesday. In opinion of most currency analysts the overwhelming success of Portuguese auction is a clear indication that euro-zone debt crisis has deepened. Portugal’s government sold almost 1.25 billion Euros equivalent to $1.62 billion worth of bonds in its debt auction.
The Euro declined to 1.2966 against the US dollar after reaching its intraday high of $1.3045 as compared to $1.2973 on Tuesday’s trading session.
Director Currency Strategy Kathleen Brooks commented, “While this may placate investors for now, it will be interesting to see if euro/dollar above $1.30 attracts sellers of the single currency, and it could be a volatile afternoon in the forex markets, even though today’s auction is encouraging, the risk of a bailout for Portugal and Spain is still strong, and both nations have a hefty debt schedule for the rest of the quarter.”
The dollar index DXY which measures the US dollar’s movement versus its six major currency counterparts declined to 80.783 as compared to 80.82 on Tuesday’s North American trading session.
The Japanese Yen remained steadier in overnight as the pair USD/YEN traded at 83.27 as compared to 83.25 on Tuesday’s late trading hours.
The British Pound declined versus the greenback to 1.5581 as compared to $1.5602 on Tuesday.
The Australian dollar remained strong versus the US dollar and surged 0.5 percent to 98.9 as economists from Bank of America Merrill Lynch raised their expectations for country’s GBP growth rate to 3 per cent for the year.
