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Yesterday the euro traded at almost its lowest level since January against the dollar as concern lingered that Europe’s debt crisis will slow regional economic growth. The 17-nation currency fluctuated before Italy sells bills and bonds tomorrow. Italy is scheduled to sell 9 billion euros ($11.8 billion) of 179-day bills and as much as 2.5 billion euros of zero-coupon 2013 securities tomorrow. It will auction debt due in 2014, 2018, 2021 and 2022 the following day. Ten-year bond yields in Italy advanced six basis points, or 0.06 percentage point, to 7.04 percent, above the 7 percent level that spurred Greece, Ireland and Portugal to seek bailouts.
The Swiss franc and the yen also appreciated against the dollar as U.S. consumer confidence gained more than forecast this month. Confidence among U.S. consumers rose in December to the highest level in eight months as an improving job market helped regain all the ground lost following the mid-year government budget battle and credit-rating downgrade. The Conference Board’s index increased to 64.5, exceeding all estimates in a Bloomberg News survey and the highest since April, from a revised 55.2 reading in November, figures from the New York-based private research group showed today. The measure averaged 53.7 during the recession that ended in June 2009.
The yen tends to gain during periods of financial stress as Japan’s export-reliant economy doesn’t need foreign capital to balance current accounts -- the broadest measure of trade. The currency has strengthened against all 16 of its most-traded peers this year, rising 4.2 percent against the dollar and 6.7 percent versus the euro. Japanese officials sold at least 14.3 trillion yen this year to stem gains that cut profits for exporters from Toyota Motor Corp. to Nintendo Co., and Finance Minister Jun Azumi has pledged more action. Intervention in 2012 may fail again as financial turmoil attracts investors to the world’s third-most traded currency for its low volatility.
EUR/USD: yesterday the pair traded with small increase.
GBP/USD: yesterday the pair has grown on a floor of a figure.
USD/JPY: yesterday the pair fell.
There is little on the data calendar today with main interest being the Dec Swiss KOF leading indicator at 1030GMT aside from the Italian auctions. US data starts at 1200GMT with the weekly MBA mortgage applications. The weekly data continues at 1245GMT with the Goldman Sachs/ICSC shopping center sales, which is followed at 1355GMT by the Redbook Average. Then, at 1530GMT, the Dallas Fed Services Outlook Survey is due.
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