Dollar Climbs Above 84 Yen, Fitch Lowered UK Rating Outlook - 15.3.2012

US Dollar The dollar strengthened yesterday against its major counterparts and reached today an 11-month high against the Japanese yen, climbing to 84.20. Treasuries also fell with the benchmark 10-year yields rising toward 2.30% before reports from the United Stated that may show further signs of improvement in manufacturing and labor market statistics. Yesterday the dollar index climbed to 80.62, the highest since January 18. At the same time the Commerce Department released trade statistics that showed the current-account deficit in the US rose to the highest in three years in the fourth quarter of 2011, reaching 124.1 billion dollars. Euro The single currency remains under pressure against the greenback and slid in Asian trading hours today to the lowest level since February 16 – 1.3003. Yesterday Italy auctioned 6 billion-euro bloc of government bonds with maturities of three and seven years. Investors demonstrated higher demand for bonds compared with previous similar sales, lowering costs of debt for both maturities. The yield of 3-year notes fell from 3.41% in the February’s auction to 2.76%, while the yield of 7-year notes was at 4.30%, the nation's Treasury reported. All in all the yield of the benchmark 10-year Italian notes dropped from about 7% to 4.83% in the recent months. British Pound The pound extended yesterday’s losses against the greenback to 1.5636 after Fitch Ratings said that Britain risks losing its top investment rating on weak economic growth, high debt levels and challenges arising from the region’s debt crisis, changing its outlook from “stable” to “negative”. The decision comes after Moody’s changed its rating outlook for Britain on February 14, having kept although the highest possible grade. Yesterday reports from the UK showed the number of jobless claims rose in February by 7200, exceeding economists’ expectations and sending the national currency lower.