Currency Updates:
The US dollar lost ground on Friday against a basket of currencies in thin trade. Optimism that the US economy is improving was boosted after economic data showed Pending Home Sales, Consumer Confidence, Housing Starts, Building Permits and Existing Home Sales rose more than expected. Versus the Japanese yen, the greenback dipped to 76.79 from 77.73, a decline of 1.2%.
The euro edged lower today on the first trading day of 2012 and expected to remain under pressure weighed by the eurozone debt crisis. Investors are expecting to see whether this year will be the year when eurozone leaders work towards a fiscal integration or the year when we will see the more vulnerable countries having to leave the eurozone. Year-end trading kept volumes low but investors appear to be focusing on Europe as 10-year Italian bond yields remain above the 7%, a level seen as unsustainable raising more concerns about the country’s ability to raise funds. 2012 marks 10 years since Europe first held euro as a currency but this year could be the most severe test for the single currency. Versus the greenback, the single currency fell as low as 1.2921 from 1.2998 traded on Friday. Against the Japanese yen, the single currency hit a ten-year low at 99.33 weighed by then yen’s safe haven status amid this year’s global financial problems.
The Australian dollar rose versus the greenback at 1.0269 from 1.0137. The Aussie which followed the decline in the euro remains vulnerable in thin trading conditions as the new year begins.
Oil prices fell to 98.58 yesterday dollars a barrel from 100.09. Gold rose to 1581.17 dollars an ounce from 1548.55. Silver edged higher to 28.45 dollars an ounce from 27.26.
