Euro rises amid spec­u­la­tion

The Pak Banker - - Company& -

FRANK­FURT: The euro rose against the dol­lar and yen amid spec­u­la­tion Euro­pean Cen­tral Bank pol­icy mak­ers meet­ing to­mor­row may sig­nal their will­ing­ness to act to pre­vent the spread of the re­gion's debt cri­sis.

The euro gained for the first time in four days against the US cur­rency af­ter ECB Pres­i­dent Jean-Claude Trichet spoke in Brus­sels yes­ter­day. The Swiss franc de­clined against the com­mon cur­rency. Euro­pean eq­ui­ties and US stock-in­dex fu­tures rose. "Trichet re­luc­tantly re­fused to rule out the pos­si­bil­ity of ex­pand­ing govern­ment bond pur­chases," said Simon Der­rick, chief cur­rency strate­gist at Bank of New York Mel­lon Corp in London.

"There's a pos­si­bil­ity the ECB could step up to the plate some­time soon. Do I think there could be a euro bounce to­day? Yes. Do I think it will be sus­tained? Prob­a­bly not."

Europe's cur­rency rose 0.7pc to $1.3075 at 8:43am in London, from $1.2983 yes­ter­day. It fell ver­sus the green­back in the past month by the most among its 16 ma­jor peers. The euro ap­pre­ci­ated 0.8pc to 109.46 yen, from 108.65 yes­ter­day. The dol­lar was lit­tle changed against Ja­pan's cur­rency at 83.66 yen. The euro gained 0.8pc ver­sus the Swiss franc. The euro's 14-day sto­chas­tic os­cil­la­tor chart de­clined to about 9 to­day, be­low the level of 20 that sig­nals an as­set's price is poised to re­verse course.

The ECB's Gov­ern­ing Coun­cil will meet to­mor­row amid spec­u­la­tion it will again de­lay its exit from emer­gency liq­uid­ity mea­sures. All 52 econ­o­mists sur­veyed by Bloomberg News ex­pect the cen­tral bank to leave its bench­mark in­ter­est rate un­changed at 1pc.

"I don't be­lieve that fi­nan­cial sta­bil­ity in the euro zone could re­ally be called into ques­tion," Trichet told law­mak­ers. The ECB's bond pro­gram is "on­go­ing" and "we will see what we de­cide."

The com­mon cur­rency de­clined 6.9pc against the dol­lar in Novem­ber, the sharpest monthly drop since May as Euro­pean lead­ers strug­gled to con­tain a wors­en­ing sov­er­eign debt cri­sis that forced Ire­land last week to fol­low Greece and ask for an in­ter­na­tional bailout.

Euro­pean Union gov­ern­ments on Novem­ber 28 agreed to give Ire­land an €85bn aid pack­age. Ire­land's cri­sis is rem­i­nis­cent of the one that pre­ceded the EU's de­ci­sion in May to set up a €750bn bailout fund to help res­cue Greece. On the same day, the ECB took the un­prece­dented step of agree­ing to buy govern­ment bonds.

"It's po­si­tion ad­just­ment," said Cliff Tan, head of emerg­ing-mar­ket cur­rency re­search at So­ci­ete Gen­erale SA in Hong Kong. -PB News

IS­LAM­ABAD: Leader of House in Se­nate, Sen­a­tor Nay­yar Hus­sain Bukhari called on Pres­i­dent Zar­dari at Ai­wan-e-Sadr. -App

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