Forexpros – The U.S. dollar surged on Thursday after the long term Italian bond auction missed targets, prior to falling back against the euro.
During late session U.S. trade, the greenback was slightly higher against the euro, with EUR/USD off by 0.16%.
The single currency was hit by a multitude of bearish factors including a disappointing Italian bond auction and European Central Bank woes.
Italy’s Treasury long term bond auction came in at just under 7% missing the target and triggering additional debt worries.
Nick Bennenbroek of Wells Fargo told Bloomberg, “The Italian debt auction was a little bit underwhelming.”
This added to fears that the ECB’s crisis lending programs have not helped the banking sector.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down by 0.01% to hit 80.89.
Also Thursday, data showed that U.S. pending home sales rose far more-than-expected in November, surging 7.3% after a 10.3% increase the previous month.
In a separate report, research group Kingsbury International said its Chicago purchasing managers’ index dipped to 62.5 in December from a reading of 62.6 in November, which was the highest since April.
Meanwhile, the euro fell to a 10 year low against the yen on the ECB’s growing balance sheet
The greenback was up against the pound, with GBP/USD lower by 0.44% to hit 1.5390.
Meanwhile, the greenback was lower against the yen and against the Swiss franc with USD/JPY dropping by 0.32% to hit 77.68 and USD/CHF falling 0.13% to hit 0.9415.
The greenback was lower against its Canadian neighbor and higher against its Australian and New Zealand counterparts with USD/CAD falling 0.32% to hit 1.0211, AUD/USD gaining 0.32 to hit 1.0126 and NZD/USD advancing 0.23% to 0.7706.
Light Christmas and New Years holiday volume added to the volatility as traders relaxed in preparation for 2012.
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