EUR/USD Eases to 1.28 on Periphery Bonds’ Slump

The dollar climbed versus a majority of its major peers with growth in the U.S. forecast to outpace Europe and Japan, and on speculation the worst slump against the yen in 15 months yesterday was overdone.

The Australian dollar and Brazilian real declined the most against the greenback after Federal Reserve Bank of St. Louis President James Bullard said U.S. economic fundamentals remain strong, sending bond yields higher. The euro fell as concern increased that a financial crisis is returning to the region’s so-called peripheral nations.

“U.S. Treasuries yields are higher, that’s a sign of overshooting earlier and we’re getting back to an orderly market,” said Masafumi Takada, a New York-based director at BNP Paribas SA. “Dollar-yen should come back up.”

Bloomberg

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