Tradervox.com (Dublin) – The 17-nation currency gained against the greenback after Italy sale of debt diminished fears that euro zone member country will not be able to access the debt markets. The euro came from a dip caused by European Central Bank governing council member’s comment indicating that Spain and Italy debt crisis will not be solved by the measures proposed by the ECB. The US dollar gained against the New Zealand dollar after New Zealand’s Finance Minister Bill English said that the country would benefit from a weaker kiwi.
According to David Mann who is the Head of Research in New York at Standard Chartered, Italy’s debt sale is getting more attention right now as investors and analysts check how it went. He predicted that the euro will be trading between $1.2170 and $1.2405 for the short term. He also indicated that there is a lot that has been promised by the ECB and the market has taken a wait and see mood.
The Italy debt sale involved the sale of one-year bills which were sold at 2.767 percent up from 2.697 percent they went for in July. Investor will now turn their attention on the Greece auction which will take place tomorrow. The demand for Italy’s debt was higher as investors bid 1.69 times the amount of bills sold up from the 1.55 times in July. The euro advanced by 0.6 percent against nine of its trading peers on this sale. The New Zealand and the Australian dollars registered the largest decline against the 17-nation currency.
According to Vassili Serebriakov who is a currency strategist in New York at Wells Fargo & Co, the auction went smoothly but the higher yields might be a concern for the nation which has made the euro increase significantly as risk sentiments declined.
The 17-nation currency rose by 0.4 percent against the dollar to trade at $1.2332 at the close of trading in New York yesterday. This is the biggest intraday trading registered by the euro since August 3. The euro had earlier declined by 0.2 percent on Luc Coene’s comments. The euro increased by 0.4 percent against the yen to trade at 96.58 yen, the 17-nation currency had declined by 1.1 percent throughout the week ending Aug 10.