Irish bonds rose today as EU and International Monetary Fund (IMF) negotiators arrived in Dublin for talks on a rescue plan for Ireland.
At 4pm, the yield on the 10-year Irish bond was down 0.012 per cent to 8.133 per cent, with the spread to the German bund at 543.2 basis points. E$arlier, the yield dipped as low as 7.944 per cent.
Central Bank governor Patrick Honohan today said he expects the country to tap a loan from the EU and IMF worth "tens of billions".
The euro advanced for a second day against the dollar and the yen on optimism a bailout for Ireland will prevent contagion across the region's larger debt markets.
The 16-nation currency rose from near a seven-week low versus the greenback as European and IMF officials travelled to Dublin to discuss possible support. Minister for Finance Brian Lenihan said the government is prepared to ask for a rescue package for its banks.
The dollar and yen fell against most major counterparts as stocks and commodities gained, spurring demand for higher-yielding assets.
"For the most part it's a classic risk-on move," said Greg Anderson, a currency strategist at Citigroup in New York. "One of the keys of these packages, why they calm market fears, is they tie Europe together. The countries won't exit."
The euro rose 0.5 per cent to $1.3598 at 10.22am in New York, after declining to $1.3448 on November 16th, the lowest level since September 28th. The single currency gained 1 per cent to 113.70 yen, from
112.55 yesterday. The dollar appreciated 0.5 per cent to 83.61 yen, from 83.18 yen.
Europe's shared currency pared gains after the Conference Board's index of US leading indicators rose in October for a fourth consecutive month, gaining 0.5 per cent on signs the Federal Reserve was preparing to take additional action to spur the economy.
The Standard and Poor's 500 Index gained 1.6 per cent, and the MSCI World Index climbed 1.7 per cent. Gold rose for the first time in three days, reaching $1,358.81 an ounce, and crude oil for December delivery increased as much as 2.1 per cent to $82.14 a barrel.
Additional reporting: Bloomberg