Euro steady versus dollar, rebounds versus Swiss franc
By William L. Watts, MarketWatch
LONDON (MarketWatch) — The U.S. dollar was lower versus most major rivals Thursday, losing ground in quiet, pre-holiday trade as investors showed signs of improved risk appetite.
The dollar index (DXY 80.74, +0.01, +0.01%) , which measures the greenback against a basket of six major currencies, traded at 80.652, down from 80.781 in North American trade late Thursday.
U.S. stock index futures pointed to a mixed start for Wall Street, but equities pressed to a fresh two-year high on Wednesday, underscoring increased investor appetite for riskier assets, strategists said. The dollar tends to lose ground on rising risk appetite.
Investors will be focusing on a range of U.S. data later in the day, including November durable-goods orders, consumer spending, weekly jobless claims and the latest University of Michigan consumer sentiment figures.
“The grind higher in U.S. equity indices continues, as does the grind higher in oil prices,” said Kit Juckes, head of forex strategy at Societe Generale. Alongside positive comments on U.S. growth on Wednesday from Philadelphia Federal Reserve President Charles Plosser, “the benign mood should last through until New Year unless the bond market wrecks the party.”
The euro (EURUSD 1.3072, -0.0017, -0.1298%) traded at $1.3085 versus the dollar, down from $1.3094 late Tuesday.
The single currency posted little reaction to a German newspaper report that Berlin has outlined a proposal for a new euro-zone stability fund.
Earlier, France’s statistical agency reported a 2.8% monthly rise in consumer spending, boosted largely by a jump in auto spending.
The euro rebounded 0.5% versus the Swiss franc after falling to all-time lows versus the currency this week. The euro changed hands at CHF1.2550 in recent action.
Steve Barrow, currency strategist at Standard Bank, said the euro’s recent weakness versus the franc looked “pretty ominous,” potentially signaling a desire by traders to stage an attack on the euro early in the new year.
Seasonal factors tend to be a positive factor for the euro versus the dollar this time of year and may have halted a bigger fall by the currency pair for now, he said. Also, U.S. stocks have outperformed European equities in the fourth quarter, which means any year-end reweighting of global stock positions could involve buying euro-zone stocks and the euro.
“With this in mind, some euro bears might prefer to hold their fire until 2011, rather than take a chance now,” he said, in a research note.
The U.S. unit slipped to 83.05 yen (USDYEN 83.3500, -0.2300, -0.2753%) versus the Japanese currency, down from ¥83.59 late Wednesday.
