Sun, Nov 25, 2012 - Page 15 News List

Euro rises most in nine months on debt prospects


The euro had its biggest gain against the yen in nine months on speculation European policymakers would agree to keep aid flowing to Greece next week.

The shared currency gained the most in two months versus the US dollar as German business confidence unexpectedly rose from the lowest in two-and-a-half years. The yen fell at least 1.2 percent against all of its 16 most-traded counterparts as exports waned and amid speculation Japanese elections next month would hand power to an opposition party that advocates aggressive monetary easing.

“The euro’s strength is mostly short covering — investors getting nervous in case we do get some kind of announcement on a Greek debt buyback or cuts to the interest rates on loans,” Eimear Daly, a currency-market analyst at Monex Europe in London, said on Friday. “Comments by the potentially new political leader have really been driving the yen in a way we really haven’t seen play out before. Low market volatility is really letting the yen weaken off.”

The euro rallied to ¥106.98 on Friday, the highest since April, before trading at ¥106.94 for a 3.2 percent weekly advance, the most since the five days ended Feb. 24. The shared currency touched US$1.2991 on Friday, the strongest in three weeks versus the greenback, and ended the week 1.8 percent stronger at US$1.2976.

The yen fell for a second week against the US dollar, declining 1.3 percent to ¥82.40. It reached ¥82.84 on Thursday, the weakest in more than seven months.

The Australian and Canadian dollars gained after the IMF said the two may be classified as reserve currencies. The Canadian dollar rose 0.8 percent to C$0.9929 per US dollar, in the biggest weekly gain since Aug. 10. The Aussie was 1.2 percent stronger at A$1.0461.

The pound fell for a second week versus the euro, but advanced against the US dollar for the first time in a month on bets US lawmakers would forge a deal to avert the fiscal cliff, dampening demand for the world’s reserve currency.

The pound fell 0.8 percent this week to £0.8084 per euro. It reached £0.8109 on Friday, the weakest level since Oct. 24. It rose 0.9 percent to US$1.6028, its first weekly advance since Oct. 26.

This story has been viewed 1470 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top