The euro strengthened slightly against the US dollar yesterday following comments by US Treasury Secretary Timothy Geithner, who gave a positive view of the US banking sector. Geithner stated on Tuesday that US banks are well capitalized, showing an optimistic view that the banks are over the worst of the recession. He also said that the Obama administration has enough money, through the Troubled Asset Relief Program (TARP), to deal with any further problems that may arise. This resulted in investors flocking to riskier currencies as opposed to the safe haven of the dollar.
Additionally, a surprisingly strong rise in German investor confidence in April gave the euro a boost while the dollar weakened against most major currencies. Germany's ZEW economic sentiment index showed its sixth month of gains, jumping to a positive 13% from a negative 3.5%. April's reading is the first positive one since July 2007. The euro was up at $1.2944 in late US trading from $1.2924 on Monday.
There are no significant announcements taking place in the US or eurozone today, but traders will be watching the release of the budget report in the UK closely as this is likely to have an effect on currencies across the board.
No comments:
Post a Comment