Thursday, February 10, 2011

Forex | Afternoon Overview | UK Rate | 10 February 2011

Forex | Afternoon Overview | UK Rate | 10 February 2011

Previous session overview :

The dollar rallied against the euro on Thursday as concerns about the ongoing sovereign debt crisis cropped up again.

The dollar added to its gains after U.S. jobless claims fell more than expected, hitting their lowest level since July 2008. The dollar also climbed above JPY83 for the first time since Jan. 27 after the weekly unemployment report was released.

Yields on Portuguese bonds rose, re-igniting worries about whether the country can handle its massive debt load at such expensive levels. Portugal and the bigger Spanish economy are the two primary worries in the euro zone right now, so anything that might indicate they would struggle to access or repay debt would hurt the common currency.

The European Central bank was reportedly buying Portuguese debt Thursday to help keep a lid on yield increases, which has helped the euro bounce off its lows for the day.

The sovereign debt problem had been pushed to the background recently in favor of expectations that the European Central Bank will raise interest rates in the near future. Those expectations had broadly helped the euro.

EURUSD trades at USD1.3580 from USD1.3733 late Wed.

The U.K. pound was at USD1.6039 from about USD1.6102 late Wednesday.

The Canadian dollar is moderately lower Thursday, with broad-based strength in the U.S. dollar temporarily eroding buying interest in its Canadian counterpart. The U.S. dollar is trading at CAD0.9963 from CAD0.9949 late Wednesday. Read more