The euro has gained against the US dollar and risen from a 7-week low against the yen, supported by Irish and Spanish bond auctions.
The sale of 2014 and 2020 bonds by Ireland was seen as a test of investor appetite in the wake of concerns about the cost of cleaning up the banking sector in the country. Concerns were eased, however, when sales of the paper were met with strong demand, as were sales of 12 and 18-month Spanish treasury bills.
Ireland comfortably managed to sell its allocation of 2014 and 2020 bonds at bid-to-cover ratios in excess of three times, alleviating concerns about funding which had been troubling investors recently.
However, uneasiness about the economic outlook in Europe is still affecting euro prices, with a prominent German survey producing some concern about whether the largest economy in Europe will be able to achieve a sustained recovery.
Camilla Sutton, currency strategist at Scotia Capital in Toronto, commented: "Forex markets are just taking a breather after the violent swings of last week in euro/dollar and dollar/yen."
"Traders are still looking for a catalyst to take the dollar in one direction or the other," she said.
RSS
