Jonathan Webb, head of FX strategy at Jefferies Bache, says the European Central Bank is heading for quantitative easing and that would weigh on euro/dollar.
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Gold was flat in thin trade on Friday, headed for its biggest weekly gain in more than a month, but the credit downgrade of Spain and its impact on the euro may weigh on market sentiment.
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Spot gold held steady on Thursday under the pressure of a rising dollar, after prices fell more than 1 percent in the previous session when the U.S. Federal Reserve decided to twist its balance sheet more heavily towards long-term securities.********
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Gold steadied on Thursday but was still under pressure from rising equities and optimism over tentative steps by European policy makers to resolve and contain the region's debt crisis.
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Pimco's manager in charge of the world's largest bond fund, Bill Gross, may have made a mistake when betting against US bond prices earlier this year, but the economy has deteriorated faster than anyone had appreciated, analysts told CNBC Tuesday.
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Gold fell on Wednesday after hitting record highs on growing fears of a U.S. default, as technical weakness, a rallying dollar and a broad sell-off of riskier assets prompted bullion investors to take profits.
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Spot gold held ground above $1,550 on Tuesday, as investors fled from risky assets on fears of a spreading euro zone debt crisis, but a stronger dollar and weak equities weighed on sentiment.
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As concerns over the outlook for the Chinese economy intensify, currency traders have scaled back their bets that the renminbi will continue to strengthen against the U.S. dollar. The FT reports.
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Gold rebounded on Tuesday after posting its biggest one-day loss in a month in the previous session on growing worries about another economic downturn, but a weaker U.S. dollar could offer some support.
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The euro dipped against the dollar on Wednesday, inching back towards a two-month low hit earlier this week as worries over Greece's finances and Europe's spreading debt crisis continued to cast a pall over the single currency.
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The euro was steady against the dollar and the yen on Wednesday after recovering from recent lows, but wariness over sovereign debt problem in Europe made investors nervous about piling up euro positions.
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