By FX Empire.com
The pair showed a slight decline on Thursday trading after the release of upbeatU.S.reports which prompted investors to damp the dollar as a safe haven.
Data from the U.S. showed improvement as housing starts increased to 628,000 in Oct., beating estimates of 610.000, while initial jobless claims dropped to 388,000 in the week ended Nov. 12, below both estimates and the revised readings of 395,000 and 393,000 respectively.
The better-than-predicted U.S. data revived hopes the U.S. economy may lead recovery in the fourth quarter after the recent data has been showing progress.
The data gave some confidence regarding the housing sector which triggered the 2008 crisis and the labor market which suffered tremendously from the undergoing slowdown.
In fact, the optimistic figures managed to ease the tensions spreading in markets on the back of the rise in Spanish and French bond yields which renewed concerns the debt contagion is spreading among the euro region’s largest economies.
The Spanish 10-year yields jumped to 6.975%, the highest level since 1997, from 5.433% in the previous auction where the sell came at 3.56 billon euros, below the maximum target of 4 billion euros. By the same token, the rate of Italian 10-year notes remained above 7%
In France, the rate of the five-year bills climbed 9 basis points to 2.87%, while the spread between French and German bunds soared to a record high of 200 basis points.
Still, the main focus is on the latest developments from the euro area, especially from Italy and Greece which have the highest debt in the region and witnessing political changes meanwhile.
On Friday, the week ends with the release of no data from the Swiss economy while theU.S.will release leading indicators which may show a rise to 0.5% in the month of Oct. from the prior reading of 0.2%.
The releases from theU.S.are not expected to have an impact on the pair’s movements where the main concentration will probably remain on the general sentiment which is meanwhile on the euro area.
Originally posted here
