Euro Snaps Decline Against Dollar After Netherlands Sale
Tuesday, 24 April 2012 | 14:30
The euro snapped its biggest decline in more than a week against the dollar as the Netherlands sold 2 billion euros ($2.6 billion) of debt.
The euro gained versus most of its 16 major peers before Dutch Prime Minister Mark Rutte speaks in parliament today, less than 24 hours after tendering his Cabinet’s resignation. The yen pared gains on speculation the Bank of Japan (8301) will announce further monetary easing policies on April 27. Australia’s dollar fell after a government report showed inflation slowed more than economists forecast, boosting speculation the central bank will cut interest rates.
“The Dutch auction got away without a serious hitch, which is good news for the euro,” said Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce. “People are mindful of the BOJ meeting at the end of the week, which is stopping them from going too much into the yen.”
The 17-nation currency advanced 0.1 percent to $1.3165 at 9:54 a.m. London time after falling 0.5 percent yesterday, the biggest decline since April 13. It was 0.1 percent higher at 106.88 yen, after earlier sliding as much as 0.5 percent. The Japanese currency was little changed at 81.17 per dollar.
The Netherlands sold 1 billion euros of 3.75 percent notes due 2014 at an average yield of 0.523 percent and 995 million euros of 4 percent bonds maturing in 2037 at an average yield of 2.782 percent.
Rutte will speak during a debate in parliament in the Hague in a bid to break a budget deadlock over additional cuts of at least 9.5 billion euros needed to comply with European deficit limits. He offered to quit after budget talks with Geert Wilders’s Freedom Party collapsed.
The Australian slid dropped to a two-week low after a report showed consumer prices rose 1.6 percent in the first quarter from a year earlier, the slowest pace since 2009.
Central bank Governor Glenn Stevens signaled on April 3 he may end a three-month pause in interest-rate cuts as soon as next month if weaker-than-forecast growth slows inflation.
The so-called Aussie dropped 0.3 percent to $1.0292 after falling to $1.0247, the weakest since April 11.
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