Thursday, October 18 09:51:22
The euro eased from a one-month high today as some sovereign investors booked profits after two days of gains, though losses would be limited by soft Spanish bond yields and optimism about the global economy. A jump in U.S. bond yields after strong housing numbers helped the dollar to a one-month high against the yen. The Japanese currency has been under pressure on expectations the Bank of Japan will announce fresh stimulus. The euro was slightly lower on the day at $1.3095, having risen to $1.3140 on Wednesday -- its highest since mid-September. Bids from sovereign investors are reported at $1.3080 with technical resistance seen at its four-month high of $1.31729 and stop-loss buy orders cited above $1.3180.
Traders cited option expiries at $1.3100. The euro rose to a one-month high of 103.850 yen, just below a four-month peak of 103.858 hit in September, though a failure to break above that level at its first attempt prompted some profit-taking. "We are expecting some more upside in the euro as investors seem to get comfortable with the timeline about when Spain will seek a bailout and the ECB's bond buying will be triggered," Beat Siegenthaler, currency strategist at UBS.
"Spanish two-year bond yields are at levels seen in September while at the same time the global picture is also improving given the Chinese and the U.S. data." A raft of data from China was either in line with or better than expectations, helping the euro and riskier assets. Growth in the third quarter was 7.4 percent from a year earlier, in line with a Reuters poll. ( C) Reuters