The euro slipped from a more than two-month high against the dollar on Tuesday as falling equities hit risk appetite, prompting investors to book profits ahead of the results from stress tests on European banks.
French Economy Minister Christine Lagarde said on Tuesday she was confident about the results of European bank stress tests due to be officially announced on Friday.
I am confident, the minister said after a news conference, but declined to enter in further details.
The euro fell from a more than two-month high against the U.S. dollar on Tuesday as tumbling equity prices hit appetite for risk, prompting investors to book profits ahead of the results from stress tests on European banks.
The Bank of Canada raised its key interest rate by 25 basis points to 0.75 percent on Tuesday, as expected, but cautioned that the domestic and global recoveries will be slower than previously expected in a hint that any further hikes may be gradual.
The euro fell to a session low against the dollar while Bund futures extended gains on Tuesday after Goldman Sachs (GS.N) released second quarter results.
The euro fell to a low of $1.2840 EUR= from just above $1.2870 before the earnings were released, close to 2 cents from the high of $1.3028 reached earlier in the day.
The euro fell on Tuesday, reversing a climb to its highest against the dollar in more than two month, as European shares fell and investors reckoned its gains have been overdone before bank stress test results.
The euro eased a bit after hitting a two-month high against the dollar on Tuesday, but remained supported as weak U.S. economic data hurt the greenback.
The euro rose as high as $1.3029 on trading platform EBS, with dealers saying key stop-losses -- closing of positions to cap loss-making trades -- had been taken out around $1.3010, with more above $1.3030. By 0929 GMT (5:29 a.m. EDT), it was up 0.1 percent on the day at $1.2955.
Emerging markets were in high demand in mid July, with bond fund inflows at a record, as investors chose dynamic developing economies over lagging advanced markets, EPFR Global said on Tuesday.
Emerging market equity funds tracked by EPFR posted combined inflows of more than $3 billion for the week ended July 14, while emerging market bond funds took in $745 million, bringing their year-to-date inflows to an all-time high of $18.5 billion.
The chief of Greece's Public Debt Management Agency (PDMA) said on Tuesday he was satisfied with the sale of 1.95 billion euros ($2.53 billion) of 13-week T-bills at a yield of 4.05 percent, the country's second debt sale since a giant EU/IMF emergency loan backstop agreed in May.
The European Bank for Reconstruction and Development warned on Tuesday of contagion risk from a sell-off in Hungary as Budapest appeared unwilling to back down in a disagreement with lenders over fiscal reform and a bank tax.
Investors should take data showing currency speculators started to bet against the U.S. dollar this month for the first time since March with a big grain of salt.
While the turnaround in positioning from long to short on the dollar shows that sentiment on the U.S. currency has deteriorated sharply, analysts say it should not be interpreted as a sign the greenback is about to collapse.
The dollar eased on Tuesday, inching closer to a two-month low versus the euro hit last week as investors continued to cut long positions on more disappointing U.S. economic data.
The greenback rose a little against the yen on bids from Japanese importers, but remained close to a seven-month low marked last week, leading many market players to look to what authorities in Japan could do about a firm yen.
The dollar eased slightly on Tuesday, inching closer to a two-month low versus the euro hit last week as investors continued to cut long positions on more disappointing U.S. economic data.
The greenback rose a little against the yen on bids from Japanese importers, but was still within striking distance of a seven-month low marked last week, leading many market players to look to what authorities in Japan could do about a firm yen.
The AUD has opened fairly unchanged this morning currently trading around USD0.8690.
The Australian Dollar opens marginally higher against the greenback this morning at 0.8675.
The euro rose against the dollar on Monday after a fall in U.S. home-builder sentiment to its lowest level in more than a year added to worries about the U.S. economy.
The euro traded near its recent two-month high against the dollar, rebounding from early lows hit after a downgrade of Ireland's sovereign ratings and the suspension of talks between Hungary and international lenders.
The euro hovered near a two-month high while U.S. stocks moved sideways on Monday as worries about the pace of a U.S. economic recovery kept markets cautious.
After Friday's worst one-day drop since late June, the S&P and other U.S. stock indexes opened higher as earnings season kicked into high gear, but weak homebuilding data reminded investors of the delicate state of the economic recovery.
U.S. Treasury debt prices slipped on Monday, but volume was scant and analysts said the day's market action would be driven mostly by the stock market.
The yield on the benchmark 10-year Treasury note, which had fallen to 2.93 percent by Friday's close as stocks suffered their worst one-day drop since June, was trading at 2.95 percent, while its price was off by 6/32.
Hungary's markets sold off on Monday after the government rebuffed lenders' calls for tougher austerity measures, bringing weekend talks on further aid to a premature end and rattling investor confidence.
European governments must press ahead with deficit cuts to restore investor confidence even if it means economic growth suffers, European Central Bank Governing Council member Christian Noyer said on Monday.
The euro hovered near a two-month high against the dollar on Monday, rebounding from lows hit after a downgrade of Ireland's sovereign ratings, as investors awaited results of European banks' stress tests.
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The euro stayed below two-month highs versus the dollar on Monday, dented by a downgrade of Ireland and the suspension of talks between Hungary and the IMF, but recovered as traders awaited results of bank stress tests.
Moody's Investors Service downgraded Ireland's sovereign bond rating to Aa2 with a stable outlook from Aa1.
The euro stayed below two-month highs versus the dollar on Monday, dented by a downgrade of Ireland and the suspension of talks between Hungary and the IMF, but steadied as traders awaited results of bank stress tests.
Moody's Investors Service downgraded Ireland's sovereign bond ratings rating to Aa2 with a stable outlook from Aa1.
Europe may be hoping its long-awaited bank stress tests are anti-climactic, judging from the confident comments coming from officials.
Jean-Claude Juncker, chairman of the euro zone finance ministers, doesn't expect any big catastrophes when results from the tests of 91 European banks are released on Friday.
The euro pulled back from two-month highs on Monday, as investors booked profits on its rally while lingering concerns about Europe's sovereign debt problems looked likely to keep a lid on future gains.
High-yielding currencies like the Australian and New Zealand dollars were also under pressure as subdued U.S. data and falling equities .SPX led investors to shun risky trades.
The Aussie dollar held onto support around 0.8750 in early offshore trade rallying back above the 88 cent handle on the back of gains in EUR/USD.
The Australian Dollar once again retreated during Friday evening's trade as concerns about the global economic recovery emerged and equity markets headed down in Europe and the US.
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It seems the fate of gold is depended on central banks across the world. Till now, economic crisis looming over the global economy has been the biggest boost for gold prices as more and more people rushed to buy gold as a safe haven option.
