Dhaka, Bangladesh (BBN) – The rise and fall of Euro (EUR) in the last week was centered on Euro zone sovereign debt crisis as the market was waiting for the result of the much anticipated Italian bond auctions.
The euro rose the most against the dollar in two weeks on Friday on hope that auction of Italian bonds will go smoothly, a weekly market update said.
However, EUR’s gaining streak ended on Tuesday after a rise in Italian and Spanish bonds yields. EUR further weakened against USD and Yen (JPY) to a fresh one-month low as the euro zone debt crisis threatened to engulf top-rated members such as, as government bonds of core countries came under pressure.
It fell as far as USD 1.3460, its lowest level in more than a month, after the French bond yield spread over benchmark German bonds hit euro-era highs.
EUR eased further to reach USD 1.3421, which is the lowest since October ’10. Over the week EUR eased by 0.96 percent against USD reaching USD 1.3468, the update added.
The USD continued to weaken against the JPY throughout the week. After the massive yen-selling intervention by Japan to restrain the Yen’s strength, market remained very cautious throughout the week.
The USD briefly spiked higher against the JPY on Tuesday but later gave back most of its gains, and traders said the move was likely caused by a large-lot flow and stop-loss buying, and was probably not intervention. USD ended the week falling 0.89 percent against the JPY to 76.70.
Throughout the week commodity bore the impact of the dip in risk appetite with the Australian Dollar (AUD) hitting a five-week low of USD 1.0021 on Wednesday.
The AUD/USD remained under downward pressure and could try to push under parity to a support pivot point of USD 0.9986 in the near term, experts opined. AUD eased by 0.17 percent over the week to 1.0062.
BBN/SSR/AD-19Nov11-11:01 am (BST)