The US dollar rose today as the German bond auction could be considered a disaster, fueling fears of the European debt contagion, while the US economy showed the signs of recovery.
Germany auctioned its debt today and missed its maximum target by 35 percent, sending yield higher and reinforcing the negative outlook for the future of the European economy. Economists explained that the bad outcome of the auction doesn’t mean that the German economy is bad, but rather shows that investors are reluctant to deal with any European economy, even such powerful as Germany. The fundamental data from Europe was mixed today, making it hard to asses the state of Europe’s economic health.
The data from the United States was also mixed, but showed positive tendencies. The unemployment claims rose a little, but the personal spending rose and the consumer sentiment improved. The US currency is still threatened by the impasse in talks among the US politicians about the debt reducing measures and the potential third round of quantitative easing, but traders left such concerns for tomorrow and today the greenback emerged a winner.
EUR/USD dropped from 1.3504 to 1.3347 and GBP/USD went down from 1.5631 to 1.5535 as of 23:34 GMT today. USD/JPY rose from 76.95 to 77.27 and touched the daily high of 77.57 today.
Source: dailyforexnews.info
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