Euro touches 7-week high against the US dollar

The euro strengthened against the US dollar yesterday, climbing to a 7-week high before finishing the day at $1.3647.

• In early trading the euro strengthened against the greenback, after better-than-expected UK retail sales, housing market and industrial production data buoyed investor demand for riskier currencies.
  
• The single currency also rose early yesterday on the back of positive comments from the European Central Bank President made the previous day. Jean-Claude Trichet said the eurozone’s economy is at an “inflection point” and was showing tentative signs of recovery.
  li>Also boosting demand for more high-yield currencies like the euro was the news that investment spending in China had soared, even though its exports fell more sharply than expected. This further fanned risk appetite in the market, helping the euro hit a seven-week high against the dollar just before lunch.
  
• The single currency’s gains were extended following the release of much better-than-expected US Trade Balance figures early yesterday afternoon. This month’s reading of -$27.58 billion was far ahead of the -$28.90 billion analysts had forecast.
  
• As a result, the single currency finished up markedly on the day, its fourth rise in five days against the greenback.
  
• The euro has resumed its rise against the dollar this morning as improved risk sentiment in the market continues. There are no important announcements due in the eurozone today, while in the US Month-on-Month Retail Sales figures for April are due at 13.30 BST.