Euro weaker on low bond yields; sterling down; US dollar effected by new hurricane

Euro weaker on low bond yields; sterling down; US dollar effected by new hurricane

Story link: Euro weaker on low bond yields; sterling down; US dollar effected by new hurricane

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The euro was not able to hold early gains against the US dollar on Thursday after bond yields in Europe fell to an all-time low, below 3 percent. Lingering uncertainty following the elections in Germany also had an effect, as did the resignation of Italy’s finance minister.

The euro had been up to $1.2269 in relation to the dollar before slipping back to lose 1 percent to $1.2144 against the greenback. The shared currency also was up against the yen early in the day before slipping back to ¥135.63. The euro did gain 0.1 percent to SFr1.5536 versus the Swiss franc.

Sterling was weaker on a decline in export orders to manufacturers. The UK currency lost 2 cents to the US dollar, to $1.7913, was down 0.5 percent to £0.6777 versus the euro, and fell 0.8 percent to ¥199.83 against the yen.

The US dollar was under pressure on Thursday on concerns about what effect Hurricane Rita would have on the economy, and especially on oil and gasoline supply. These worries had more effect on currency trading than did data showing jobless claims up and leading economic indicators down, particularly in the category of consumer sentiment. However, losses sustained by the dollar in Asian trade were for the most part recovered in European trade.

The dollar rebounded to gain 0.7 percent versus the Swiss franc, to SFr 1.2792, and was up 0.2 percent to ¥111.54.

Meanwhile, the Polish zloty has gained 10 percent versus the euro since April and traded on Thursday at 2.9189 in relation to the shared currency. Polish elections scheduled for this weekend helped the zloty higher, and traders believe that it could gain even more strength if the Polish bond market can sustain its rally.