By TraderVox.com
For the first time in four days, euro showed some gains against the dollar after China promised to give help to solve the debt crisis. This has eased the pressure on the currency as the debt crisis continues with Greece seeking to secure a second bailout. The 17-nation currency rose to its highest level against the yen; to a level it had reached two months ago.
A report showing that the gross domestic product for the European nations was not as low as it had been estimated by many analysts. Another currency that rose tremendously against the yen is the New Zealand dollar which rose to a six month high after the nation’s retail sales increased for the fourth quarter.
The weakening of the yen against major currencies is also as a result of the government’s intervention to weaken the currency. The euro had some good news from China when news emerged that the country would be offering help to ease the debt crisis in the region. The Governor of the People’s Bank of China Zbhou Xiaochuan said that the nation is going to invest in Europe’s bailout funds.
Further, the country indicated intentions of sustaining its holdings of euro asset which came as a relief for the eurozone. China has the largest foreign-exchange reserves totaling to $3.18 trillion. In his statement, the Governor indicated that the country was looking to diversify its foreign holdings from US dollar dominated holdings. These comments by the governor have prompted the increasing bid for the risk assets which has seen the euro gain considerably.
According to the European Union’s statistics, the GDP of the 17 nation region fell by only 0.3 percent against an estimate of 0.4 percent. Moreover, the region’s second largest economy, France, grew by 0.2 percent which was also unexpected. These unexpected results have also added to the 17-nations currency increased performance against the major currencies in the world. However, the failure to hold a meeting in Brussels by the regions finance ministers is a bad sign for the successful conclusion of the Greece crisis. These sentiments were echoed by the Italian Prime Minister Mario Monti.
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