Euro Snaps Three-Day Drop as Liquidity Evaporates Into Weekendby
UniCredit, Deutsche Bank stick with bearish call on currency
Nordea says many clients have closed their books for the year
Calm descended on the markets as the dollar halted three days of gains and Treasury yields fell, with traders reporting lower-than-average volumes going into the weekend.
The euro rebounded after falling to the lowest level in 13 years on Thursday, while sterling was trading near its 50-day moving average. The Australian dollar headed for its biggest weekly drop in a month.
“The markets are taking a breather after the Fed,” said Aurelija Augulyte, a Copenhagen-based currency strategist at Nordea AG. “Trading volumes are below average as clients are mostly done for the year.”
- EUR/USD advances 0.5% to 1.0463; the break below 1.0500 may trigger more weakness given thin liquidity going into the year-end, UniCredit AG analyst Vasileios Gkionakis wrote in a note to clients Friday
- A stabilization in Treasury yields is attracting fresh buyers, which may end up being even more negative for EUR/USD, according to Deutsche Bank analyst George Saravelos; the bank remains bearish on the currency, expecting it to slide to at least 95 cents next year
- GBP/USD steady at 1.2423; is hovering near 50-DMA at 1.2412
- AUD/USD falls 0.2% today, taking weekly loss to 1.4%; pair poised to drift toward 0.7140/0.7100, according to Societe Generale