Forex: Thursday’s review

The euro rose against the majority of its most-traded counterparts as Italian bond yields reversed course and fell, easing concern the region’s third-largest economy will be unable to handle its debt crisis.The 17-nation currency gained from the lowest in five weeks versus the dollar and the yen as two people with knowledge of the trades said the European Central Bank bought more Italian government bonds, following purchases earlier. The euro fell earlier as Spanish and French borrowing costs rose at auctions. Italy’s credit rating may be cut to low investment grade should the country lose market access, while the nation’s economy may already be in a recession, Fitch Ratings said. Italy’s new government has a “window of opportunity” to carry out urgent measures together with ECB support to bring down borrowing costs, the ratings company said in a special report. The euro erased gains versus the yen and euro as stocks and commodities tumbled.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, dropped for the first time in four days as builders broke ground on more American homes than forecast in October, an annualized 628,000 . Fewer first-time claims for unemployment insurance payments were filed in the U.S. last week, 388,000, an indication the job market may be gaining traction, Labor Department data showed.

The pound strengthened against the dollar, snapping a three-day decline, after British retail sales unexpectedly rose in October.

The Australian dollar reached parity with the greenback for the first time in more than a month as appetite for risk faded.

EUR/USD: yesterday the pair has closed day at a level of opening.

GBP/USD: yesterday the pair advanced.

USD/JPY: yesterday the pair traded nearby Y77.00.

On Friday US events start at 1315GMT, when New York Fed President William Dudley delivers a speech on the economic outlook at policy at SUNY Albany. At 1500GMT, the index of leading indicators is expected to rise 0.6% in October, with positive contributions from a steepening of the yield curve, rising stock prices, lower jobless claims and a longer manufacturing workweek. These should be offset by faster vendor deliveries. Later on, at 1815GMT, Dallas Fed President Richard Fisher delivers a speech on the Fed and the Texas economy to the Texas Teach Alumni Association in Dallas.