The Euro gained against the US dollar in overnight trading as Chinese top official Wang Qishan gave supporting remarks on measures taken by International Monetary Fund and European Union to stabilize euro zone’s debt situation. As per Qishan remarks at EU-China High Level Economic and Trade Dialogue the measures by EU and IMF will soothe European financial markets.
The Euro surged to day’s high of 1.32 against the US dollar on the remarks of Wang Qishan but later on settled around $1.3160 as compared to $1.3123 on late Monday. Where Qishan remarks gained investors confidence but on the other hand Moody’s decision to place Portugal’s sovereign debt rating under review for a downgrade further facilitated selling pressure in the Euro.
Head of Foreign Exchange Strategy, Kit Juckes at Societe Generale commented, “A sharp decline by the euro, and a further deterioration in the credit quality of euro-zone debt, is not in China’s interests,” he further added, “However, the image of a Chinese knight arriving in full armor on a white charger to ‘save the day’ is a bit far-fetched, what we are reminded of this morning however, is that with the weight of opinion and probably positions tilted so heavily against the euro, it does not take much to trigger a small bounce.”
The dollar index DXY which measures the greenback’s movement versus its major six rivals declined to 80.429 in overnight trading session as compared to 80.611 on late Monday.
However the Pound Sterling declined to 1.5487 versus the US dollar as compared to $1.5517 on Monday. The British Pound dropped on the increased public sector borrowing in UK as reported by Office of National Statistics.
The US Dollar declined to 83.69 against the Japanese Yen as compared to 83.83 as on Monday. As compared to other Asian currencies, the Australian dollar surged 0.3 percent to 99.59 versus the US dollar as the Reserve Bank of Australia decided keep its key cash rate at 4.75 percent.
Daily forex trading news written by Rehan from DailyForexTrade.com
