European Session – Euro rallies to 2-year high above 1.38
December 27, 2013 1:28 pm
The euro stood out as the best performer during a lively European session on Friday, rising to new 2-year highs above $1.38. Thin volumes due to the holidays allowed for exaggerated moves.
There were various headlines out of Europe which acted as a catalyst to the move higher in the euro today. There was data from Spain showing the country’s current account surplus grew 1.714 billion euros in October, up from a surplus of 339 million euros in September.
Spain is the fourth largest economy in the Euro zone and was one of the hardest hit and heavily indebted during the height of the region’s crisis, so the data is quite important and encouraging.
Other data showed French PPI rose 0.5% in November from a previous decline of 0.2% month-over-month.
Meanwhile, adding to the euro’s buoyancy today was an article in German newspaper “Bild” regarding an interview with European Central Bank Governing Council member Jens Weidmann, in which he showed his support for higher interest rates. “We must take care to raise interest rates again in a timely manner should inflation pressures build,” Weidmann was quoted as saying.
The euro advanced 0.5% in the European session to enter the US session at 1.3.844 after hitting as high 1.3882, the highest since October 2011.
Broad based euro strength lifted the single currency against the yen to a new 5-year high of 145.65, up 0.8% in the European session alone.
The softer dollar was noticeable against the British pound as cable rallied to a 2-1/2 year high of 1.6576, and entered the US session with a 0.5% gain.
The dollar also suffered against the Swiss Franc, as it dipped to a low of 0.8807 from the session open of 0.8916, marking a new 2-year low.
The dollar fared better against the broadly weaker yen, gaining 0.18% in the European session to 104.93, moving closer to the 5-year high of 105.02 hit in Asia earlier today. The pair remains within a range since yesterday when the dollar was lifted by upbeat US jobless claims numbers. The number of Americans filing for unemployment benefits fell more- than- forecast last week to 338,000, the lowest level in nearly a month.
While the quiet holiday trading has made the euro stand out against the dollar today, it is expected that the greenback will make a rebound soon as markets look to the start of Fed tapering in January 2014.
The euro stood out as the best performer during a lively European session on Friday, rising to new 2-year highs above $1.38. Thin volumes due to the holidays allowed for exaggerated moves.
There were various headlines out of Europe which acted as a catalyst to the move higher in the euro today. There was data from Spain showing the country’s current account surplus grew 1.714 billion euros in October, up from a surplus of 339 million euros in September.
Spain is the fourth largest economy in the Euro zone and was one of the hardest hit and heavily indebted during the height of the region’s crisis, so the data is quite important and encouraging.
Other data showed French PPI rose 0.5% in November from a previous decline of 0.2% month-over-month.
Meanwhile, adding to the euro’s buoyancy today was an article in German newspaper “Bild” regarding an interview with European Central Bank Governing Council member Jens Weidmann, in which he showed his support for higher interest rates. “We must take care to raise interest rates again in a timely manner should inflation pressures build,” Weidmann was quoted as saying.
The euro advanced 0.5% in the European session to enter the US session at 1.3.844 after hitting as high 1.3882, the highest since October 2011.
Broad based euro strength lifted the single currency against the yen to a new 5-year high of 145.65, up 0.8% in the European session alone.
The softer dollar was noticeable against the British pound as cable rallied to a 2-1/2 year high of 1.6576, and entered the US session with a 0.5% gain.
The dollar also suffered against the Swiss Franc, as it dipped to a low of 0.8807 from the session open of 0.8916, marking a new 2-year low.
The dollar fared better against the broadly weaker yen, gaining 0.18% in the European session to 104.93, moving closer to the 5-year high of 105.02 hit in Asia earlier today. The pair remains within a range since yesterday when the dollar was lifted by upbeat US jobless claims numbers. The number of Americans filing for unemployment benefits fell more- than- forecast last week to 338,000, the lowest level in nearly a month.
While the quiet holiday trading has made the euro stand out against the dollar today, it is expected that the greenback will make a rebound soon as markets look to the start of Fed tapering in January 2014.
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