Instead, EUR/USD has dropped back below the 1.3400 level, and is, in fact, lower than it was at open. The gains made earlier in the session has pretty much been erased. There were some hopes following the Italian bond auction, but since then the euro has struggled.
Italian bonds did sell reasonably well, with the upper target nearly being reached, and the new three-year bonds selling reasonably well. However, the bonds also came with high yields not seen for Italian bonds since the beginning of the euro era.
The news injected some optimism into the Forex market, helping the euro. However, things quickly turned as Forex traders considered the wider implications of the situation. Even though Italy has been able to sell much of its debt, there are still problems with sovereign debt in the eurozone. Investors may be focusing a great deal on holiday shopping right now, but it’s telling about the euro that it is one of the few major currencies struggling against the US dollar today.
At 14:32 GMT, EUR/USD is lower at 1.3313, down from the open at 1.3319, and off from the high at 1.344. EUR/GBP is lower at 0.8533, down from the open at 0.8586/ EUR/JPY is lower at 103.5985, down from the open at 103.8770.
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