The euro climbed to a one-month high against the U.S. dollar during European trading hours on Thursday after the sentiment in the single currency improved significantly following Italy’s successful auction of its sovereign bonds amid lower borrowing costs.
Italy, reeling under political gridlock ever since the voters gave a fractured mandate during elections which were held in February with no political party having enough numbers to control the upper house of the senate, raised euro 7.169 billion ($9.37 billion) by auctioning three government bonds.
Following the bond auctions, the euro traded above $1.31 against the dollar while the benchmark Stoxx 600 index also held modest gains.
At last check, (around 8:00 a.m. EST), the euro edged up 0.45% to trade at 1.131.30 against the dollar, which is its one month high.
Meanwhile, the yen fell sharply against the euro in Asian trading hours.
On Thursday, the euro hit its three-year high against the yen, continuing its gains after the Bank of Japan (BOJ), with an aim to drag the economy out of deflation, announced series of extremely aggressive monetary easing measures , last week, triggering sell-off pressure on the yen. Investors are worried that the unprecedented monetary easing will trigger capital flight.
However, BOJ’s newly appointed governor, Haruhiko Kuroda allayed market participant’s concerns yesterday by saying that the central bank’s aim was not to weaken the yen.
The euro climbed 0.3% on the day to 130.835 yen, its highest level since January 2010, according to Reuters.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.