Euro Strengthens on Positive Economic Reports
The dollar and the yen lost ground against the euro, as an index of services and industrial production in Europe showed better than estimate numbers, creating speculations of an economic recovery in the Eurozone.
An index combining services and industrial numbers in the Eurozone rose from 38.3 in March to 40.5 in the last report, which was significantly more than what economists were expecting. After breaking multiple record lows, the slump in Europe may be easing, as the French manufacturers confidence rose after one year of constant decreases, reaching the lowest level in more than 30 years. Credit Suisse, a leading European bank, also pushed the euro up showing the first earning reports after consecutive periods of losses.
The fact that the economic conditions are not deepening in Europe is already a solid factor to support the euro, an opinion shared by most of the financial analysts. These kind of positive reports bring investors back to purchase equities and invest in currencies that, facing a serious situation of crisis, would be avoided. Not only the euro but high-yielding currencies such as the Australian dollar will tend to rise if favorable reports continue to be released.
The EUR/USD rose from 1.2935 to 1.3044 crossing the 1.30 line for the first time since last week. The EUR/GBP had a sharp rise from 0.8832 to 0.8978.
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Earlier News About the Euro:
- Euro Continues to Fall on ECB Policy Disagreement (2009-04-20)
- Euro Falls as ECB President Fails to Improve Economic Confidence (2009-04-17)
- Euro Declines on Unemployment Report (2009-04-01)
- Euro Declines in Correction Following Rally (2009-03-19)
- EUR Fell as Eastern Europe May Not Get Help (2009-03-02)