Wroclaw Boy: p PLN - GBP shot up from 4.72 to 4.87 today.
Monday, the euro was at $1.3120 from $1.3241 late Friday, according to EBS via CQG. The dollar was at Y84.25 from Y84.06, while the euro was at Y110.53--near two-month lows--from Y111.38. The U.K. pound was at $1.5573 from $1.5617. The dollar was at CHF1.0001 from CHF1.0032.
The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 80.810, near two-month highs, from 80.357.
Further unnerving investors, Italy sold EUR6.837 billion of bonds Monday, only slightly below the maximum planned EUR7 billion, but paid higher yields than a month ago to sell the three- and 10-year bonds.
Spain's five-year credit default swaps rose 25 basis points to 350, Portugal's increased 43 basis points to 545, and Italy's sovereign CDS were 16 basis points higher at 231.
That means it cost $350,000 a year to protect $10 million of Spanish bonds for five years--and $545,000 for Portuguese bonds and $231,000 for Italian bonds, respectively.
Separately, there is a growing trend of a contagion leaking out of the euro zone and heading east, said Alan Ruskin, global head of G-10 foreign exchange strategy at Deutsche Bank in New York. There is concern among economies closely linked to the zone, and a necessary knock-on effect, he said
At around noon EST, the Polish zloty traded off 2.7% against the safe-harbor greenback while the Hungarian forint slid 2.45% against the dollar, he said.
Also, investors are now short the euro based on fears of debt contagion spreading in the euro zone, according to a Scotia analysis of the weekly Commitments of Traders report released by the U.S. Commodity Futures Trading Commission late Monday.
Net speculative bets, called shorts, against the euro, totalled roughly 8,300 contracts in the week ended Nov. 23. That position represents a value of $1.4 billion in anti-euro bets.
With the ICE Dollar Index strengthening, Deutsche Bank's PowerShares U.S. Dollar Index Bearish exchange-traded fund was down 0.56% from late Friday, while its PowerShares U.S. Dollar Index Bullish fund was up 0.60%. The two exchange-traded funds are based on Deutsche Bank currency-futures indexes, whose composition mirrors that of the ICE's Dollar Index.
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