The euro strengthened against the US dollar by 1.51 cents (1.11%) yesterday, finishing the day at $1.3779.
• In early trading, the euro strengthened against the dollar as improved risk sentiment in the market stoked demand for riskier currencies.
• News that a strong euro had not been a concern among European finance ministers further extended the single currency’s gains yesterday lunch. Portuguese Finance Minister Fernando Teixeira dos Santos’s comments sent the single currency into positive territory after he said the European Union was not concerned about the strength of the single currency.
• Strong performance from European equity markets also stoked the euro’s gains as investors looked to the riskier single currency, and away from the perceived safe-haven of the dollar.
• The dollar plunged in late trading yesterday afternoon after US Treasury secretary Tim Geithner said the financial system was “starting to heal” following a period of severe trauma. His comments further stoked investor confidence that a global economic recovery may tentatively be underway, with riskier currencies like the euro benefitting as a result.
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