By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – The euro rallied on Thursday as French government bonds held steady a day after the fall of the French government, even as bitcoin rose to a level above $100,000, with investors vowing to announce a pro -currency to run the US. Securities and Exchange Commission.
The spread between French and German 10-year yields narrowed on Thursday to 76.9 basis points, the tightest gap since November 22. That has supported the euro.
Despite Thursday's gains, however, the euro was on track to post a loss this week, its fourth in the past five weeks.
French President Emmanuel Macron met with friends and parliamentary leaders on Thursday as he sought to quickly appoint a new prime minister to replace Michel Barnier, who officially resigned a day after opposition lawmakers voted for the his government to send out.
“The market is looking at the financial impact caused by the collapse of the French government. It seems that the departure is not as influential to the spending plans as was expected, and that keep the euro alive,” said Amo Sahota, executive director at FX consultancy. Klarity FX company.
“We saw a lot of similarities when Greece is going through a lot of political instability and that could be a big drag on the euro area. We got two big economies within the euro area with struggling governments: France and Germany and analysts are worried about it. the euro and they have already lowered their forecasts as a result.”
Germany was thrown into political turmoil when Chancellor Olaf Scholz's coalition collapsed last month, as well as disagreements over government spending.
The euro was last up 0.6% at $1.0567, moving further away from the two-year low of $1.0332 hit in late November as traders prepared for a drawdown for the France.
In terms of technical factors, Shaun Osborne, chief FX strategist at Bank of Scotland (TSX:) in Toronto, said Wednesday's short-term positive price action accompanied by moderate gains through Thursday's low $1.05s, has “the euro extending slightly higher to test key resistance and momentum possible bulls. $1.0590.”
Traders are also almost certain that the European Central Bank will cut interest rates next week and are pricing in around 157 basis points of a discount by the end of 2025.
Meanwhile, bitcoin, the world's most famous digital currency, has been on a tear since November on the prospect of Donald Trump's US presidential election victory including an environment friendly regulation for cryptocurrencies.
It rose to an all-time high of $103,649 in Asian hours, fueled in part by President-elect Trump's nomination of pro-crypto Paul Atkins to run the SEC. It was last up 1.3% at $99,147, bringing year-to-date gains to more than 130%.
“With an improved US regulatory environment and next-gen stable driving adoption in Europe, we believe that bitcoin and the broader crypto market could continue to go from strength to strength,” wrote Star Busmann's Arnoud , chief executive of Netherlands-based payments technology company Quantoz Payments.
YEN ON THE RISE
In Asia, the Japanese yen rose as high as 149.66 per dollar but ended up 0.4% at 150.01 as traders speculated whether the Bank of Japan will raise interest rates later this month. Analysts said comments from conservative policymaker Toyoaki Nakamura that he is not against raising rates helped push the currency higher.
Expectations had been growing that the BOJ would raise rates at its December 18-19 meeting, bolstered by comments from Governor Kazuo Ueda, although media reports published on Wednesday suggested the BOJ could skip a rate hike this month.
South Korea gained some ground when the country's finance ministry said the government would implement a 40 trillion won ($28.35 billion) market stabilization fund following the uproar that followed President Yoon Suk Yeol's declaration of martial law. Tuesday, which he canceled a few hours later.
The winner was last down 0.2% at 1,413 per US dollar.
The , which measures the US currency against six rivals, fell 0.6% to 105.74.
It extended losses after data showed initial claims for state unemployment benefits rose by 9,000 to a seasonally adjusted 224,000 for the week ending November 30.
The focus will be on Friday's US nonfarm payrolls report for November, which is expected to show 200,000 jobs added in the month, according to a Reuters poll, after just 12,000 jobs were created in October, the lowest number from December 2020.
Bets on Fed rate cuts were relatively steady, however, partly affected by weaker-than-expected services sector data on Wednesday and higher-than-expected jobless claims. Markets are pricing in about a 70% chance of a 25-bp rate cut later this month, and a 30% chance of a pause.
Currency
an offer
prices at
5
December
09:06
pm GMT
Last RIC Description US Pct YTD Pct High Low
on a Closed Change Application
Before
Session
Dollar 105.74 106.34 -0.54% 4.31% 106.37 105 .
index 69
Euro/Dollar 1.0583 1.0509 0.7% -4.13% $1.059 $1.0
at 509
Dollar/Yes 150.09 150.49 -0.29% 6.39% 150.76 149 .
No. 69
Euro/Yen 158.85 158.29 0.35% 2.07% 159.38 157 .
57
Dollar/Sw 0.8786 0.8847 -0.68% 4.41% 0.8852 0.87
there are 79
Sterling/ 1.2749 1.2702 0.38% 0.19% $1.2771 $1.2
696 dollars
Dollar/ca 1.4026 1.4074 -0.33% 5.82% 1.4078 1.40
neon 11
Aussie/Do 0.6449 0.643 0.31% -5.4% $0.6455 $0.6
422
Euro/Swiss 0.9298 0.9292 0.06% 0.13% 0.9322 0.92
s 91
Euro/Star 0.8298 0.8277 0.25% -4.27% 0.83 0.82
slim 73
NZ 0.5883 0.5852 0.57% -6.87% $0.5886 0.58
Dollar/Do 49
ll
Dollar/No 11.0336 11.0513 -0.16% 8.87% 11.0809 11.0
road 11
Euro/New Zealand 11.6831 11.6168 0.57% 4.09% 11.692 11.6
there are 124
Dollar/Sw 10.8522 10.9227 -0.65% 7.8% 10.9454 10.8
bird 5
Euro/Sweden 11.4844 11.4815 0.03% 3.23% 11.5235 11.4
at 83
