Euro Keeps Pressure On Reeling Dollar
The euro held its strong recent gains in thin trade versus the dollar on Monday, with most European markets shuttered for the extended Easter break.
Traders at their desks refrained from taking aggressive positions in currencies other than those backed by soaring commodity prices.
With gold and silver at prices not seen in decades, the aussie dollar touched its highest in almost thirty years against the U.S. dollar this morning.
Focus now shifts to the U.S. Federal Reserve, which will make its latest decision on interest rates Wednesday.
Although a change in the central bank’s key lending rate is highly unlikely, the Fed may signal it has no plans to renew its controversial asset purchase plan when it expires in June.
The euro sat near $1.46 versus the euro on Monday, just below last week’s 16-month low of $1.4647.
In economic news from the U.S. sales of new homes rebounded 11.1 percent in March to a seasonally adjusted annual rate of 300,000, the Commerce Department said Monday.
Still, new home sales were down 21.9 percent from March 2010 levels.
The euro was steady versus the yen, fetching Y119.70. Early gains took the euro to GBP 0.8850 versus the sterling, not far from a recent 7-month high of 0.8915.
Bank of Italy’s Governor Mario Draghi has gained support from French President Nicolas Sarkozy in the race to become the next European Central Bank chief, Bloomberg News reported Monday, citing an unidentified source.
Sarkozy is expected to disclose his support to Draghi tomorrow in Rome. As Draghi is the only representative for the post from the big-four eurozone nations, namely Germany, France, Italy and Spain, the French support raises the chance of him being selected as the ECB chief, the Bloomberg report said. His bid apparently has German backing.
The current central bank President Jean-Claude Trichet’s term expires on October 31.
Spanish producer prices rose 7.8 percent annually in March after rising 7.6 percent in February, the statistical office INE said Monday. On a monthly basis, producer prices rose 0.9 percent, the same rate of growth as seen in February.
