Euro rises against the yen
Published: 31 Oct at 9 AM
The euro has strengthened following a successful sale of Italian five- and 10 year bonds that saw the country’s borrowing costs significantly reduced and data from Spain that shows that in the third-quarter the country’s economy contracted at a slower rate than expected.
Having risen against the dollar after an announcement by the Bank of Japan that its programme of asset purchasing as a way of helping the economy would be less aggressive than investors were hoping for, the dollar has regained its footing.
Both the Australian dollar and the euro have also recovered from lows against the Japanese currency. Trading in New York has been slightly lighter than usual as Hurricane Sandy passed over. However, the damage appears to have been less severe than some experts were predicting before the storm hit.
Demand for the euro has also been given a boost by figures coming out of the US that suggest that the housing market might be starting to turn around. However, analysts are not expecting the news to slow the Federal Reserve’s programme of quantitative easing that is squarely aimed at pulling the unemployment rate down.
The euro is unlikely to make any significant further gains as finance ministers discuss the situation in Greece and it is still unclear when Spain will apply for a bailout.