Forex: Wednesday’s review

Yesterday the euro fell to a six-week low against the dollar after Germany received insufficient bids at a debt auction, adding to concern Europe’s sovereign-debt crisis is driving away investors from the region’s assets. Germany missed its 6 billion-euro ($8 billion) maximum sales target at a 10-year bond auction today by 35 percent, prompting investors to question the status of the securities as a haven from the region’s debt crisis. The bunds drew a yield of 1.98 percent.

A composite index based on a survey of purchasing managers in European manufacturing and services rose to 47.2 from 46.5 in October, Markit Economics said in an initial estimate, suggesting the sovereign-debt crisis is starting to affect economic growth in the region’s core nations.

The dollar rose versus all of its 16 most-traded peers as a gauge of European services and manufacturing output shrank and data signaled China’s manufacturing will tumble. The HSBC Flash Manufacturing PMI for China, Australia’s biggest trading partner, fell to 48 this month, predicting the biggest contraction since March 2009. That compares with a final reading of 51 in October.

The pound declined 0.7 percent to $1.5522, after being as low as $1.5511, the least since Oct. 7. It fell for a third day after minutes of the central bank’s rate-setting meeting this month showed increased support for additional stimulus. Bank of England policy makers at the meeting unanimously kept the target for asset purchases at 275 billion pounds, after raising it by 75 billion pounds in October, the minutes showed.

EUR/USD: yesterday the pair has lost two figures.

GBP/USD: yesterday the pair has lost a figure.

USD/JPY: yesterday the pair has grown, updated a week’s high.

US markets are closed Thursday, as the nation enjoys the annual Thanksgiving Day holiday. However, Europe provides a full calendar for the day.At 0815/0530 European Commission President Jose Barroso gives a speech at a conference, in Brussels, with observers looking for any expansion of the previous day's euro bond comments. Data starts at 0900GMT, Germany's November IFO business survey is released, along with Italian November ISTAT consumer survey. At 0930GMT, Bundesbank Board member Rudolf Boehmler gives a speak on the debt crisis, in Hohenheim, Germany. The main event for the day is likely to be the summit when French President Nicolas Sarkozy meets German Chancellor Angela Merkel and Italian Prime Minister Mario Monti, in Strasbourg. A press conference is provisionally slated for 1300GMT. UK data is slated for 0930GMT, with the release of Q3 GDP, Second Estimate and the Sep Index of Services.