Friday, 13 February 2009

Dollar strengthens over the euro

In Thursday's trading the dollar strengthened over the euro by 0.43 cents to close the day at 1.2859. Earlier in the session the euro did fall as low as 1.2725 when stocks fell and risk aversion saw the euro sold heavily as investors sought the safety of the dollar. However, it did manage to trim its losses by the close as American stocks rebounded and better than expected US retail sales data saw risk appetite return to the currency markets.

In today's trading the euro has continued to strengthen, reaching as high as 1.2940 on renewed risk appetite and therefore increased demand for the single currency. This is ahead of the announcement of eurozone GDP figures; Germany's have already been released and show that the eurozone's largest economy contracted 2.1% in the 4th quarter of 2008 and 1.7% during the year. In America the Reuters/Michigan Consumer Sentiment Index is announced this afternoon.

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