Forex News – Euro heads for third straight week of losses

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The euro made some gains against the dollar in European trading on optimisms that the European Central Bank might lend funds to the IMF to bail out indebted euro zone economies. This helped bring down Italian and Spanish bond yields. EURUSD gained 1.3 percent to hit an intraday high of 1.3613 but fell by late North American trading to 1.3493. Sentiment on the euro overall remains bearish, and the currency has recorded three straight weeks of losses and has fallen 5.6 percent since the October 27 high of 1.4246.

 

Sterling had a brief rally against the dollar, tracking gains in the euro on the ECB lending news. This was short lived and the optimism quickly faded by the end of the trading day in New York. GBPUSD fell from the intraday high of 1.5887 to 1.5761. On the week, sterling fell 2.5 percent versus the dollar as risk appetite was sapped by surging bond yields in Italy and Spain.

 

The Canadian dollar gained against the US dollar for the first time in five days after Canadian consumer prices rose more than forecast in October showing some sign of improved economic activity. This reduced speculation the Bank of Canada will cut interest rates. Consumer prices rose 0.2 percent in October, beating forecasts of a 0.1 percent increase but unchanged from the previous month. Meanwhile a slightly improved risk sentiment and a rebound in crude oil prices helped lift the loonie 1 percent from a month low against the greenback. USDCAD fell from 1.0298 to 1.0198 before a slight retracement. However on the week, the loonie was weaker than the greenback, losing almost 2 percent.

 

Gold tracked equity markets to end slightly higher on Friday after tumbling 3 percent on Thursday. Gold climbed to a day high of $1,737.20 moving off yesterday’s low of $1,710.26 despite persistent euro zone debt woes. On the week, bullion saw its largest weekly loss since September, declining 4.8 percent.