Friday, 20 February 2009

Euro's initial gains against dollar pared back

The euro strengthened over the US dollar yesterday, reaching as high as 1.2759 as investors waited for word from German Chancellor Angela Merkel as to how Germany may help other struggling eurozone economies. Speculation about US jobless claims figures also saw the dollar undermined. However, the euro's gains were pared as Merkel declined to comment on how Germany could help its struggling neighbors. US Initial Jobless Claims data showed that 627,000 people lost their job in January and this undermined the dollar allowing the euro to close the day up 1.43 cents at the 1.2671 level.

In today's trading the dollar has strengthened back over the euro, reaching as low as 1.2569 after worse than expected Purchasing Managers Index data was released in the eurozone and as Asian traders continued to be worried about the health of the European banking sector. The only other significant economic announcement today comes in the form of US Consumer Price Index figures.

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