Euro Rises to Two-Week High After Spain Sells Debt; Aussie Dollar Weakens
Thursday, 19 January 2012 | 12:24
The euro strengthened to a two-week high against the dollar as Spain sold more than its maximum target at a debt sale amid investor optimism that has seen demand for the securities increase this year.
The 17-nation currency gained for a third day versus the greenback as the Greek government began a second day of talks with private creditors in a push to reach an accord to slash the nation’s debt. Spain sold 6.61 billion euros ($8.5 billion) of bonds, exceeding the maximum target of 4.5 billion euros set for the sale. Australia’s dollar weakened for the first time in three days after a government report showed employers unexpectedly cut workers in December.
The euro rose 0.2 percent to $1.2886 at 9:54 a.m. London time after climbing to $1.2908, the strongest since Jan. 5. The common currency appreciated 0.1 percent to 98.88 yen. The dollar fell 0.1 percent to 76.73 yen.
Demand for Spain’s 2016 bond was 3.24 times the amount sold, the central bank said, compared with 1.71 times at an auction of the same security last week. Demand for the 2022 bond was 2.17 times the amount sold, versus 1.54 times in November. The nation also auctioned securities due in 2019.
The euro has declined 3.6 percent in the past six months, according to Bloomberg Correlation-Weighted Indexes. The yen has advanced 8.6 percent over the same period and the dollar has risen 6.6 percent.
The Australian dollar weakened against all of its 16 major counterparts after the statistics bureau said the number of people employed dropped by 29,300 in December. Economists had estimated an increase of 10,000.
“The knee-jerk reaction was to take the Aussie dollar lower,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “We’ll probably need to see a weakish looking CPI number next week to really make the case for a cut from the RBA.”
Australia’s dollar dropped 0.4 percent to $1.0394, and fell 0.5 percent to 79.75 yen.
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