Markets focused on Sandy, EURUSD goes higher


Today, the euro jumped higher against the American dollar, as investors’ attention remained mainly focused on the Hurricane Sandy. However, gains are going to be limited before an Italian bond auction later in the day.

The currency pair EURUSD reached 1.2940 during late Asian trading, later on it stayed firm at 1.2930.

The pair was supposed to find support at 1.2881, which is a bottom from October 26, and a two-week low and resistance at the level 1.2996, a top from October 24.

The position of the single currency remained unstable after Spanish Prime Minister Mariano Rajoy announced on Monday that he would ask for a bailout when it is „in the interests of Spain”.

His comments were a result from the official data, which showed that the Spanish retail sales dropped extremely fast in September, eclipsing the economic outlook.

Italy intends to auction as much as EUR7 billion of government bonds, but traders remained scared amid concerns over former Prime Minister Silvio Berlusconi’s threat to bring down the current government.

The euro was slightly higher against the pound, with EURGBP at the level of 0.8057, but slipped down against the yen, with EURJPY sliding to 102.81.

The yen got stronger against the dollar and the euro earlier, after the easing steps by the Bank of Japan disappointed market expectations for more aggressive measures.

The BoJ increased the size of its asset purchase program by JPY 11 trillion yen following its policy meeting earlier. In a common statement with the central bank, Economics Minister Seiji Maehara claimed that the new measures were an essential step towards coping with deflation.

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