Euro finishes over $1.406 against US Dollar

The euro strengthened by 1.65 cents (1.19%) against the US dollar yesterday, closing the day at $1.4064.

• In early trading yesterday the euro gained against the dollar, as investors questioned whether there was a strong possibility of a US interest rate rise later this year to justify pushing the currency higher.
  
• The single currency’s gains continued yesterday afternoon after rises on European and US equity markets bolstered appetite for riskier currencies. The news that 10 of the US’s biggest banks could repay some of the money they received in government bailouts drove this rally. In addition, news that Latvia, one of the most troubled economies in Eastern Europe, could yet avoid devaluing its currency helped the euro.
  
• So far today the euro has risen slightly against the dollar, as the market looks for clues about the chance of a US interest rate rise by the end of the year.
  
• There are no major announcements out in the eurozone today, whilst in the US Trade Balance figures are due at 13.30 BST.