Euro extends gains on dollar

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- The euro pared back earlier losses against the dollar Wednesday, after Germany said it would ban short selling on some European bank shares and the zone's government bonds.

What prices are doing: The euro rose 1.42% on the dollar to $1.2385 Wednesday, after the European currency touched a new four-year low versus the dollar the day before.

chart_ws_currency_usd_eur.03(2).png

The dollar fell 0.52% versus the British pound to $1.4412. It was down 0.9% against the Japanese yen at ¥91.52.

The dollar is up 8% against the euro over the month, as the shared currency has taken a hit on debt concerns.

What's moving the market: Late Tuesday, Germany's financial regulator announced a ban on so-called naked short sales of debt securities issued by euro zone countries as well as the country's ten leading financial companies.

The restrictions will apply until March 31, 2011. The announcement initially drove the euro down against the dollar, but the euro gained later after investors realized European leaders are serious about stabilizing the currency, said Boris Schlossberg, director of currency research at GFT Forex.

"By taking the speculative shorts out of the market, they've naturally lowered the cost of credit in the market right now," Schlossberg said. "That has calmed the markets down."

In short selling, traders bet the value of an investment will fall. Traditional short sellers borrow the security with the aim of selling it, and then they buy it back at a lower price hoping to pocket the difference.

In a "naked" short sale, however, investors short the investment without actually borrowing the shares or bonds. That makes it easier to drive down the asset's value. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.95%3.94%
15 yr fixed3.05%3.02%
5/1 ARM3.34%3.48%
30 yr refi4.02%4.01%
15 yr refi3.13%3.10%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,135.72 38.82 0.21%
Nasdaq 4,982.81 15.67 0.32%
S&P 500 2,101.04 2.51 0.12%
Treasuries 2.11 -0.01 -0.52%
Data as of 8:08am ET
Company Price Change % Change
Bank of America Corp... 16.00 0.16 1.01%
Apple Inc 126.41 -2.13 -1.66%
AbbVie Inc 56.86 -3.41 -5.66%
Avon Products Inc 9.05 -0.05 -0.55%
General Electric Co 25.82 0.16 0.62%
Data as of Mar 5

Sections

The company Allstar allegedly lured customers in with misleading TV commercials and then overcharged them. More

Wage growth has become the central focus of the economy's health. It will impact workers and investors. More

Frank & Oak, Airbnb, and Net-a-Porter are just a couple of companies investing in the antiquated medium. More

Lawmakers and consumer advocates are speaking out against the special treatment given to debt collectors hired by government agencies across the country. More