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

Just the hot list include
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 fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 32,627.97 -234.33 -0.71%
Nasdaq 13,215.24 99.07 0.76%
S&P 500 3,913.10 -2.36 -0.06%
Treasuries 1.73 0.00 0.12%
Data as of 6:29am ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET

Sections

Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.