Dollar mixed as Italian bond auction supports euro

Investing.com - The U.S. dollar was mixed against the other major currencies on Wednesday, as concerns over Greece and the U.S. fiscal cliff continued to weigh on market sentiment, but the euro remained buoyant.

During European morning trade, the dollar turned lower against the euro, with EUR/USD rising 0.35% to 1.2745.

The euro hit session highs against the greenback after Italy saw borrowing costs fall to the lowest level since October 2010 at an auction of three-year government bonds.

Italy’s Treasury sold EUR3.5 billion worth of three-year government bonds at an average yield of 2.64%, down from 2.86% at a similar auction last month.

Meanwhile, official data showed that industrial production in the euro zone tumbled 2.5% in September, compared to expectations for a 1.9% decline.

The greenback was little changed against the pound, with GBP/USD inching up 0.04% to 1.5876.

In the U.K., official data showed that that the number of people claiming unemployment benefits rose by rose by 10,100 in October, the largest increase since September 2011, compared to expectations for a decline of 5,100.

However, the unemployment rate ticked down to 7.8% from 7.9% in September, against forecasts for an unchanged reading.

Elsewhere, the greenback was sharply higher against the yen, with USD/JPY rising 0.67% to 79.90, but was lower against the Swiss franc, with USD/CHF down 0.26% to 0.9448.

The yen came under selling pressure after Japan’s Prime Minister Yoshihiko Noda said earlier that he is willing to dissolve the lower house of parliament on November 16, setting the stage for elections in December.

The greenback was slightly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD sliding 0.12% to 1.0009, AUD/USD easing up 0.14% to 1.0448 and NZD/USD edging up 0.13% to 0.8169.

In New Zealand, official data showed that retail sales fell by 0.4% in the third quarter, disappointing expectations for a 0.5% rise, following a 1.3% increase in the second quarter.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.14% to 81.05.

Later in the day, the U.S. was to produce government data on retail sales, producer price inflation and business inventories. In addition, the Federal Reserve was to publish the minutes of its most recent policy-setting meeting.