NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

FOREX-Euro falls vs dollar, recovers vs Swiss franc

Published 12/21/2009, 04:58 AM
Updated 12/21/2009, 05:00 AM

* Euro falls vs dollar as Greece concerns weigh

* U.S. economy seen recovering quicker than euro zone

* Swissie falls after hitting 9-mth high vs euro overnight

* SNB intervention jitters remain

(Changes dateline, previous ex-TOKYO)

By Jessica Mortimer

LONDON, Dec 21 (Reuters) - The euro fell against the dollar on Monday, weighed down by lingering concerns about the fiscal health of Greece while recent U.S. data continued to support the dollar, though trade was quiet in a holiday-shortened week.

The single currency recovered against the Swiss franc, though, after tumbling to a nine-month low overnight when traders took advantage of thin liquidity to push it quickly through stops below 1.49 Swiss francs.

In early London trade, the franc fell sharply against the dollar and the euro, with traders saying a large dollar/Swiss franc buy order by a commercial bank triggered talk of Swiss National Bank intervention, which was unconfirmed.

"It's a thin market and people are getting very jittery about the possibility of SNB intervention," a London-based trader said.

Investors have been testing the resolve of the Swiss National Bank after it subtly altered its intervention stance earlier this month, saying it would act only to counter an "excessive" appreciation of the franc versus the euro.

At 0933 GMT, the euro was up 0.1 percent at 1.4958 francs. It had earlier crashed through stops below 1.4900 francs to hit a nine-month low of 1.4826 on trading platform EBS.

"The SNB has had a change in rhetoric - this has got speculators interested and euro/Swiss has fallen down in thin markets," ING currency strategist Chris Turner said.

Against the dollar, the euro dipped 0.3 percent to $1.4302, staying not far from a low hit on Friday of $1.4262 on EBS, its weakest since Sept. 4.

DOLLAR MOMENTUM

Solid figures on the U.S. job market and retail sales earlier this month has prompted talk the U.S. economy may recover faster than the euro zone, helping the dollar maintain its upside momentum.

The dollar index, which measures its performance against a basket of currencies, gained 0.1 percent to 77.920, hovering close to a more than three-month high of 78.141 hit on Friday.

"The dollar may extend gains a little more as momentum buyers could chase the dollar up while it stays in an uptrend," said Masafumi Yamamoto, chief FX strategist for Barclays Capital in Japan.

"But gains are likely to slow down, unlike what we saw last week, because many dollar-short positions have already been neutralised by now, and short positions in the euro on the other hand are growing," Yamamoto said.

Speculators cut bets against the dollar to their lowest level in more than 10 months in the week ending Dec. 15, U.S. Commodity Futures Trading Commission data showed on Friday.

"It looks like we may be seeing better growth prospects in the U.S. than the euro zone. Better employment and retail sales data in the U.S. has raised the possibility of a cyclical recovery in 2010," ING's Turner said.

The single currency has been pressured by concerns about the fiscal health of some countries on the euro zone periphery following recent rating agency downgrades on Greek debt.

(Additional reporting by Satomi Noguchi in Tokyo; editing by Patrick Graham)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.