PIMCO Says German Bunds More Attractive Than T-Notes

The euro continues to remain weaker against the USD despite the view that German Bonds may be a better buy than U.S. Treasuries.

In an interview with the Wall Street Journal on Monday, the head of the world’s largest bond holding company said “"Our favorite sovereign debt right now is some of the emerging economies that have suffered due to contagion, which we think will be reversed... And in the advanced economies, Germany, which we think has the best set of conditions of all the advanced economies when it comes to sovereign debt," he added.”

If true, should put upward pressure on the European currency against the USD, which has been clawing back losses against the U.S. dollar throughout the morning trading session.

The comments coincide with those of European Central Banker Ewald Nowotny telling with Wiener Zeitung on Monday that European bonds are experiencing a “speculative exaggeration” of risks, and were consequently artificially undervalued due to the fallout from Greece’s debt troubles.

On Friday, EUR/USD traded in a range of 1.3586 to 1.3746, and has traded in a range of 1.3622 to 1.3717 so far today. Support lies at 1.3619 followed by 1.3586. Resistance comes in at 1.3739 followed by 1.3755 and 1.40.