• IS provokes sea-change

    It has been a grave mistake to defy both Russia and France, says Leopold Scholtz.

  • Nene's SAA nemesis

    No political figure seems to have the guts to speak out against Dudu Myeni, says Solly Moeng.

  • The mp3 revolution

    Ian Mann takes a look at the war between digital music and the compact disc.

All data is delayed
See More

Euro falls back on profit-taking

Jan 14 2011 09:35

Tokyo - The euro fell back in Asia on Friday, as investors locked in profits after the unit surged on successful debt auctions by Spain and Italy that eased eurozone debt concerns, dealers said.

The euro fell to $1.3343 in Tokyo afternoon trade from $1.3358 in New York late on Thursday. The single European currency also eased to ¥110.10 from ¥110.62.

The dollar sagged to ¥82.51 from ¥82.79 in late New York trading.

The euro was capped by profit taking following its surge triggered by the strong bond sale by Spain and Italy on Thursday, as well as hawkish comments by European Central Bank President Jean-Claude Trichet on inflation.

Spain proved it can tap the financial markets for money, selling its maximum target of €3bn in five-year bonds with demand outstripping supply by two-to-one.

Italy soothed European debt concerns, too, raising its maximum target of €6bn in bonds on Thursday.

On the five-year bonds sold, it paid 3.67%, lower than the market rate on Wednesday's close but up significantly from the previous auction on November 12.

The Spanish and Italian bond auctions followed another healthy auction on Wednesday by Portugal, widely feared to be the next victim of the European debt quagmire.

The euro was also supported by Trichet's comments that the ECB will not shy from addressing inflation.

After the central bank announced it would keep its main interest rate at a record low of one percent for a 20th straight month, Trichet told journalists: "It is absolutely crystal clear that we will always do what is necessary to deliver price stability."

"We are never pre-committed not to move interest rates," he added.

"The euro was temporarily supported as the market got a sense of relief after smoothly going through the three auctions," said Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ.

"But that does not mean that the market sentiment suddenly brightens up as the eurozone fiscal problem is a structural issue and requires a long time to resolve," Kamei said.

Japan reshuffled its cabinet on Friday but the move had little impact on the market, dealers said.

The dollar was mixed against other Asian currencies.

It rose to 1 113.90 Korean won from 1 113.45 and to 30.48 Thai baht from 30.40. The dollar also gained to 9 067.50 Indonesian rupiah from 9 042.50 and to 44.23 Philippine pesos from 44.13.

The US unit fell to $1.2878 Singapore dollars from $1.2887 and to $29.02 Taiwan dollars from $29.03.

italy  |  spain  |  portugal  |  europe debt crisis  |  dollar  |  markets  |  yen  |  euro



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Marketing is a big concern in SA's small business community, followed by a lack of confidence and partnering with the wrong people, according to a survey.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The 25 basis points interest rate increase is:

Previous results · Suggest a vote