A batch of positive international news releases yesterday led to US dollar losses as investors shifted their funds to riskier assets. A better than expected German ZEW Economic Sentiment and Spanish debt auction led to gains for currencies like the EUR and AUD against the greenback. Meanwhile, a positive US Building Permits figure helped the dollar recoup some of its recent losses against the Japanese yen. The USD/JPY gained close to 40 pips during the European session to trade as high as 80.76.
Turning to today, a lack of news out of the US means that any fluctuations the dollar sees are likely to be due to international indicators. While news out of the euro-zone was largely positive yesterday, analysts were quick to say that the real test for Spanish debt is likely to be Thursday's long-term bond auction, which is not expected to proceed as smoothly. Should worries about the euro-zone debt crisis resurface today, investors may revert to safe-haven assets, which could lead to dollar gains.
Turning to today, a lack of news out of the US means that any fluctuations the dollar sees are likely to be due to international indicators. While news out of the euro-zone was largely positive yesterday, analysts were quick to say that the real test for Spanish debt is likely to be Thursday's long-term bond auction, which is not expected to proceed as smoothly. Should worries about the euro-zone debt crisis resurface today, investors may revert to safe-haven assets, which could lead to dollar gains.
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