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Euro pushes higher as Greece deadline, ECB eyed

Published 03/08/2012, 06:33 AM
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Investing.com - The euro pushed higher against its global counterparts on Thursday, buoyed by optimism over the level of participation in a Greek debt swap deal and after stronger-than-forecast German industrial data.

During European late morning trade, the euro was higher against the U.S. dollar, with EUR/USD advancing 0.58% to hit 1.3225.

The euro found support after official data showed that German industrial production rebounded in January after a steep drop the previous month, climbing 1.6%, surpassing expectations for a 1.1% increase.

Risk appetite was also boosted by reports that a number of major European financial institutions had signed up to Greece’s bond swap deal, which is aimed at writing down 53.5% of the country’s EUR177 billion debt.

Major Greek banks, along with most pension funds, have also agreed to participate in the bond swap.

The single currency was sharply higher against the broadly weaker yen, with EUR/JPY jumping 1.19% to hit 107.89.

The yen came under pressure earlier after data showed that Japan’s current account balance swung to a record deficit of JPY437.3 billion in January, prompting Bank of Japan Governor Masaaki Shirakawa to reiterate that the bank was prepared to loosen monetary policy again if needed to support the economy.

A separate report confirmed that Japan’s gross domestic product contracted by 0.2% in the last three months of 2011, in line with earlier estimates.

The euro was higher against the pound, with EUR/GBP adding 0.35% to hit 0.8382.

Investors were looking ahead to the Bank of England’s policy setting meeting later in the day, amid expectations that the bank would not announce any change to its benchmark interest rate or to the size of its asset purchase program.

The euro inched higher against the Swiss franc, with EUR/CHF easing up 0.02% to hit 1.2055.

In Switzerland, government data showed that consumer price inflation rose more-than-expected in February, ticking up 0.3% after a 0.4% decline the previous month.

The shared currency was mixed against the Australian, New Zealand and Canadian dollars, with EUR/AUD dipping 0.08% to hit 1.2413, EUR/NZD shedding 0.63% to hit 1.6002 and EUR/CAD adding 0.34% to hit 1.3161.

The Reserve Bank of New Zealand kept its benchmark interest rate unchanged at 2.5% earlier, saying that the sustained strength of the New Zealand dollar would eliminate the need for future rate increases.

Elsewhere, official data showed that the number of employed people in Australia fell by 15,400 in February, disappointing expectations for a gain of 5,000 jobs, bringing the unemployment rate up to 5.2% from 5.1% the previous month.

Later Thursday, the European Central Bank was to hold its policy setting meeting, which was to be followed by a closely watched press conference. In addition, the U.S. was to produce government data on initial jobless claims.


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