Euro rises to record against dollar; yen heads south
The euro rose to a record against the dollar after a private report showed investor confidence in Germany unexpectedly rose this month.
Expectations among investors and analysts climbed for a second month in March, the ZEW Center for European Economic Research said yesterday, stoking expectations the European Central Bank won't lower its key interest rate while the Federal Reserve keeps cutting borrowing costs. The yen dropped versus all 16 most-traded currencies as stocks advanced, boosting so-called carry trades.
The euro rose to a record high of $1.5495 and traded at $1.5470 by 7:27 am in New York, from $1.5343 on Monday. The yen dropped to 158.12 per euro from 156.12.
Against the dollar, the Japanese currency fell to 102.19 per dollar, from 101.76 yesterday. It rose to a 7-year high of 101.43 on March 7.
The ZEW said its index of investor and analyst expectations rose to minus 32, from minus 39.5 in February. German Bundesbank President Axel Weber said growth in Europe's largest economy remains in a "solid upswing" and that he doesn't see any leeway to lower borrowing costs.
"It's not yet clear whether inflation rates will decline considerably over the course of this year," Weber said at a press conference in Frankfurt. "That's why we have to monitor the developments very closely."
Stocks rose as record oil prices boosted the earnings outlook for the biggest energy producers and financial companies were buoyed by speculation the Federal Reserve will introduce new measures to spur lending and avert a recession.
Crude oil for April delivery rose as much as $1.30, or 1.2 percent, in electronic trading on the New York Mercantile Exchange. The contract traded at $108.77 a barrel at 11:06 am London time.
Agencies
(China Daily 03/12/2008 page17)
