Archive for June, 2009

Euro soars to 2009 dollar high (AFP)

Monday, June 1st, 2009 | Finance News

LONDON (AFP) –
The euro jumped above 1.42 dollars for the first time this year, as rebounding global stock markets persuaded investors to switch away from the safe-haven US currency, dealers said.

In London trading, the European single currency surged to 1.4246 dollars -- the highest point since December 29. It later pulled back to 1.4230 dollars, up from 1.4153 dollars in New York late on Friday.

Against the Japanese currency, the dollar fell to 94.54 yen from 95.29 yen late Friday.

"The dollar remains on the defensive despite the announcement over the weekend that GM will file for bankruptcy today," economist Lee Hardman at The Bank of Tokyo-Mitsubishi UFJ said in London.

"The key market driving dynamic remains improving global investor confidence in anticipation of a recovery in the global economy coupled with improving financial market conditions."

The euro, which is widely regarded as a higher-risk currency than the dollar, tends to strengthen when investor confidence and risk appetite improve owing to signs of growing economic stability.

Meanwhile General Motors will declare bankruptcy on Monday, ending an era in US manufacturing and setting a path for the government to take a majority stake in what was once the world's biggest corporation.

Senior US officials detailed on Sunday what they hope will be a swift process in which GM should be able to reemerge from bankruptcy protection as a new, leaner company within 60 to 90 days.

In foreign exchange trading on Monday, the dollar fell on easing risk aversion as "global growth expectations are stabilising and the financial crisis appears to be through its worst," Standard Chartered analysts wrote in a note.

But investors remained cautious ahead of a US non-farm payrolls report out later this week. They are looking for clues on possibilities for recovery amid persistent worries over America's ballooning budget deficit.

The euro was softer before a meeting on Thursday of European Central Bank (ECB) officials who are expected to keep the overnight lending rate steady at one percent.

Players are waiting on the bank's details of a plan to buy bonds to shore up credit in major European markets, SMBC chief strategist Daisuke Uno said.

The ECB has already said it will buy 85 billion dollars' (60.28 euros') worth of covered, or collateralised, bonds, a move which should help boost cash flows in French, German and Spanish markets where such instruments are traded most widely.

The purchase programme is intended to help banks raise funds so that they can then extend credit to households and firms.

On Thursday, the ECB will also release its latest staff forecasts for growth and inflation in the 16-nation bloc. A downward revision is likely for growth, owing to a disastrous first quarter in its leading economies.

The Bank of England is to meet on the same day and is expected to keep its record low interest rates unchanged at 0.5 percent. Ahead of the decision, sterling was extending its recent strong run against the dollar.

In trading here on Monday, the euro was changing hands at 1.4230 dollars against 1.4153 dollars late on Friday, at 134.58 yen (134.94), 0.8679 pounds (0.8737) and 1.5118 Swiss francs (1.5104).

The dollar stood at 94.54 yen (95.29) and 1.0626 Swiss francs (1.0663).

The pound was at 1.6394 dollars (1.6182).

On the London Bullion Market, the price of gold jumped to 987.28 dollars an ounce from 975 dollars an ounce late on Friday.

Source

Euro jumps above $1.42 (AFP)

Monday, June 1st, 2009 | Finance News

LONDON (AFP) –
The euro jumped on Monday above 1.42 dollars for the first time this year, as rebounding global stock markets persuaded investors to switch away from the safe-haven US currency, dealers said.

In morning trading here, the European single currency hit 1.4246 dollars, which was the highest level since December 29, 2008.

"The dollar remains on the defensive despite the announcement over the weekend that GM will file for bankruptcy today," said economist Lee Hardman at The Bank of Tokyo-Mitsubishi UFJ in London.

He added: "The key market driving dynamic remains improving global investor confidence in anticipation of a recovery in the global economy coupled with improving financial market conditions."

The euro, which is widely regarded as a higher-risk currency than the dollar, tends to strengthen when investor confidence and risk appetite improve owing to signs of growing economic stability.

Source