1 Wk -1.27%
1 Month -3.05%
3 Months -7.82%
6 Months 1.88%
1 Year -10.55%
High 1.4579
Low 1.1877
Q1 2011 1.29
Q2 2011 1.31
Q3 2011 1.31
Q4 2011 1.30
DAILY DETAILS
The euro gained on the US dollar earlier this morning after a successful Portuguese bond auction this morning. The Portuguese government sold €1.25 billion in four– and ten-year bonds today, with yields on the four-year notes rising to 5.4%. The yield on the ten-year note, however, fell to 6.7%. Interest in the bonds was strong, with a bid-to-cover ratio of 2.6 times for the four-year and 3.2 times for the ten-year. It was feared that yields above 7% may have forced Portugal to turn to rescue funds in order to prevent rising borrowing costs spreading across the region. Bond buying from the ECB earlier in the week and Japan and China’s stated intentions to purchase the region’s debt helped ease some of the liquidity concerns heading into the auction. Comments from EU Monetary Affairs Commissioner Olli Rehn also supported the euro, as he said that the ‘the effective lending capacity of the current European Financial Stability Facility should be reinforced and the scope of its activity widened.’ [1] With Portugal’s bond auction completed, the euro may rise in the short term. However, Spain and Italy will test the bond market tomorrow and the structural weaknesses in the euro are yet to be addressed. As a result, any gains in the euro may be short-lived. David Choe, London
Notes: Sources: [1] Reuters (12 January 2011), [2] Bloomberg news (12 January 2011). Chart data sourced from Bloomberg. Bloomberg Median Forecasts are produced by Bloomberg by taking the median level from rates forecast by a number of contributors. These contributors consist of leading banks and security firms.
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