Euro Turn Up Back

Position

Home

News

Oil & Gas

Euro Turn Up Back

Wednesday, 17 February 2010 09:30

London - Euro rose sharply against the dollar on Tuesday as investor confidence returned after European finance ministers put pressure on Greece to resolve the issue of public debt a major.
"Taste the risk of investors has increased and they have been encouraged to sell out of the defensive U.S. dollars," said Nick Serff, market analyst at City Index, the financial company in London.

Euro is usually seen as a risk in the currency markets than U.S. dollars are considered "safe" by investors.

Therefore, the euro tends to increase at a greater economic optimism.

The euro rose to 1.3744 dollars in late trading in London, from 1.3598 dollars in late Monday. Euro also rose against the Japanese currency, units of other safe haven, to 124.36 yen from 122.41 yen earlier.

Meanwhile, the dollar rose to 90.44 yen from 90.02 yen in late Monday.

Euro rises came after a meeting of EU finance ministers asked Greece to prepare for a drastic new measures on 16 March to curb the public deficit that stood out-the highest in 16-member euro zone.

The ministers were "prepared to impose additional deficit reduction measures in Greece, if necessary, and refused to say how they will make good on promises to save the nation if it can not finance the debt," ETX Capital, said in a note.

Greek customs workers and staff of the finance ministries of the European Union responded to the action by announcing a three-day strike and the Greek government has urged Europe to explain how it can help to Greece if the debt crisis spirals.

European currency has been hit in recent days by worries that Greece could fail on the national debt and the crisis of investor confidence in public finances can be spread to other parts of the euro zone.

"The fear of the risk of transmission of Greek situation and other zones continue to burden the country's future hope of activities," said Frederik Ducrozet, euro zone economist at French bank Credit Agricole CIB.

Michael Hewson of CMC Markets agreed, saying: "The problems of Greece and the euro continued to mengggelembungkan surface as the market waited for more clarity about the European plan to help Greece."

EU data last week showed that Europe's economy advanced only 0.1 percent in the fourth quarter of last year, with recovery complete stop in Germany and Italy fell back into contraction.

Dealer on Tuesday also digesting data showing that German investor sentiment fell for the fifth consecutive month in February amid fears the euro zone debt crisis and the worsening job market.

ZEW economic research institute said that the indicators of financial sector lost 2.1 points to 45.1 points, its lowest level since July 2009.

Barometer stood at 47.2 points in January, but analysts surveyed by Dow Jones Newswires estimate fell to 41.5 points this month.

"Although we have been through the deepest valleys of depression, concerns about labor market, budget deficit and the euro is not reduced," ZEW president, citing Wolfgang Franz.

In London on Tuesday, the euro changed hands at 1.3744 dollars against 1.3598 dollars at 2200 GMT on Monday, at 124.36 yen (122.41), 0.8736 pounds (0.8683) and 1.4676 Swiss francs (1.4655).

Dollar stood at 90.44 yen (90.02) and 1.0678 Swiss francs (1.0777). The pound was at 1.5732 dollars (1.5660).

On the London Bullion Market, gold prices rose to 1115.25 dollars per ounce from 1098.25 dollars per ounce on Monday. | Antaranews.com | tenderoffer.biz |