Spurred on by successful bond auctions in Spain and Italy, which led to a fall in euro zone periphery bond yields, the euro broke through key resistance at $1.2820 versus the dollar yesterday as traders moved to cover some short positions. It saw further gains overnight, rising as high as $1.2878 in early morning trade. There was also a positive reaction to comments from the chief executive of French bank Societe Generale that a deal with private creditors to voluntarily write down at least half the value of their Greek …

Euro/dollar has kept to a very tight range over the past 24 hours, regaining some stability and recovering ground from its lows of $1.2668 seen in Asian trade on Sunday night. Sentiment, however, remains fragile ahead of this week’s Italian and Spanish debt auctions, as well as key meetings on the ongoing euro zone debt crisis. German Chancellor Angela Merkel meets the IMF’s Christine Lagarde today, and is scheduled to meet Italian PM Monti tomorrow. A Germany-France-Italy summit meeting will be held in Rome on January 20, with euro zone …

The euro remains under downward pressure as we head into the first weekend of the year, starting the day below the $1.28 level versus the dollar and well below Stg0.83p versus sterling. As well as seeing 15-month lows versus the USD, heavy losses were also seen versus the yen overnight as the single currency continues to be dragged down by concerns about Europe’s debt crisis and its banking sector. With markets not expecting next Monday’s meeting between France’s Nicolas Sarkozy and German Chancellor Angela Merkel to produce much in the …

Eurozone sovereign associated risk remains the dominant theme for forex markets as trading for 2012 gets underway. After falling to a 15-month low of close to $1.29 versus the dollar last week, the euro has regained some composure but remains vulnerable to fresh selling against both the US and GBP. Amid increasing concerns about the outlook for the eurozone economy, leaders in Germany and France announced yesterday plans for a bilateral summit next week, hoping once again to find a comprehensive solution to the region’s debt crisis. Meanwhile, there was …

Sentiment improved over yesterday, helped by a stronger than anticipated German Ifo survey for December, some upbeat US housing market data and a successful Spanish bond auction. US housing starts and permits surged to a one and a half year high in November, reinforcing the view that the US economy will continue to see moderate growth. Spain, meanwhile, managed to successfully auction over €5billion of short terms paper, raising more than it had initially hoped. This pick up in sentiment has helped the euro versus the dollar, with the single …

The euro has started the week on the back foot versus other majors as it continues to be undermined by sovereign associated risks. EU discussions continue at intergovernmental level but markets remain concerned about the lack of near term progress in resolving the region’s debt crisis, potential sovereign downgrades and the likelihood that the eurozone is back into recession. Short covering ahead of year end could provide some support for the euro but at the same time sentiment appears to be increasingly moving against it.
Eurozone finance ministers are expected to …