By TraderVox.com
Tradervox (Dublin) – The euro had experienced its biggest decline after concerns rose about the region’s ability to fight debt crisis. This came as Netherland and France prepared for political realignments following elections in the country. However, the euro has continued to gain momentum advancing against the yen on speculation the Bank of Japan is set to announce another monetary easing on April 27. Last week, BOJ Governor Masaaki Shirakawa reiterated his commitment to monetary easing.
However, the main reason for the euro advance is the positive Dutch auction which went smoothly without any surprises. According to Jeremy Stretch, who is the Head of Currency Strategy at Canadian Imperial Bank of Commerce, this is a good thing for the euro and it is the reason why the euro has increased a bit against major peers. He also indicated that people are wary of the yen and they are reluctant to rush in to buying the Japanese currency ahead of the BOJ meeting set for the end of the week.
The euro advanced against the dollar by 0.1 percent to trade at $1.3165 at the beginning of the European session, after it had fallen to 0.5 percent in the Asian market registering the worst decline since April 13. The 17-nation currency was up by 0.1 percent against the yen trading at 106.88 yen. It had earlier lost 0.5 percent to the Japanese currency. The yen remained unchanged against the dollar trading at 81.17 yen per dollar.
The euro increased after Netherlands sold 1 billion Euros worth of note which is represent 3.75 percent. The notes are due in 2014 and have an average yield of 0.523 percent. It also sold 995 million euros of 4 percent bonds due on 2037 at a mean yield of 2.782 percent. However, the political situation in Europe may continue to weigh on the euro as investors avoid riskier assets.
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