Forexpros – The U.S. dollar was mixed to lower against its major counterparts in subdued trade on Wednesday, as markets were jittery ahead of a ten-year Italian bond auction despite a successful short term debt sale earlier in the day.
During European afternoon trade, the dollar was flat against the euro, trading within striking distance of an eleven-month low.
With most investors already away on year-end leave, trading volumes were low, resulting in subdued trade.
Italy’s Treasury sold EUR9 billion of six-month bills, at an average yield of 3.25%, down from a record-high 6.50% in a previous auction in November. The country also sold EUR1.73 of two-year zero-coupons at a 5% yield.
Following the auction, the yield on Italy’s 10-year bonds traded at 6.82%, falling slightly below the 7% threshold widely seen as unsustainable in the long-term.
Despite the upbeat results, Thursday’s sale of EUR8.5 billion of long-term Italian debt maturing between 2014 and 2022 was seen as a bigger test of market confidence in the country’s sovereign debt.
The greenback was moderately higher against the pound, with GBP/USD slipping 0.02% to hit 1.5666.
The greenback was lower against the yen and the Swiss franc, with USD/JPY retreating 0.24% to hit 77.68 and USD/CHF declining 0.17% to hit 0.9324.
Earlier Wednesday, preliminary data showed that industrial production in Japan fell more-than-expected in November, tumbling 2.6% after a 2.2% rise the previous month.
Separate reports showed that Japan’s retail sales declined more-than-expected in November, falling 2.3%, while household spending slumped far more-than-expected by 3.2% in December.
Meanwhile, Japan’s government said it will not change its stance on taking appropriate action in the foreign exchange market as needed.
The greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD declining 0.28% to hit 1.0158, AUD/USD climbing 0.32% to hit 1.0189 and NZD/USD advancing 0.55% to hit 0.7771.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched 0.04% lower to hit 80.11.
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