The euro climbed to an intraday high of 1.3538 against the dollar, gaining almost 1 percent from the five-week low of 1.3420. The single currency fluctuated after European bond yields stabilized, especially Italy’s 10-year bond yield back below the crucial 7% level to 6.8%. By late afternoon US trading, the euro trimmed gains against the dollar as it was weighed down by sharp losses in U.S. stocks and commodities. Apart from general scepticism over the euro zone debt crisis, investors are worried about the US debt situation as well. The so-called congressional supercommittee debt negotiations in Washington reached a deadlock today. The November 23 deadline to reach $1.2 trillion in deficit reductions or face automatic cuts is fast approaching.
The Canadian dollar briefly slipped to a five week low against its US counterpart by the late North American session as investors shed risk. The commodity-linked loonie was further weighed down by falling crude oil prices. Canada is a major exporter of oil. USDCAD rose to a day high of 1.0293 and closed at 1.0281, versus Wednesday’s close at 1.0243.
The Australian dollar traded below parity versus the U.S. dollar for the first time since October 12. The aussie is commodity-price sensitive and fell along with commodities, particularly gold. Australia is a major gold exporter. AUDUSD fell 1.4% to the day low of 0.9972 from the day high of 1.0116.
Gold fell from today’s high of US$1,766 down to a low of US$1,710 on damp risk sentiment and commodities fell across the board.