Thursday 22 June 2017

Euro rises as Greece talks continue

Matthew Brown

The euro rose from near a one-year low against the dollar as Germany and the International Monetary Fund continued talks to aid Greece, while reports showed German unemployment fell and European confidence increased.

The currency also gained versus the yen after German Chancellor Angela Merkel and the IMF pledged to step up efforts to complete a loan package to the debt-stricken Mediterranean nation.

European confidence in the economic outlook improved to the highest in more than two years in April, while German unemployment fell at the fastest pace in more than two years.

New Zealand’s dollar fell after central bank Governor Alan Bollard indicated he may raise interest rates at a slower pace than in previous cycles.

“There’s a battle between hope and fear, and hope in the form of greater confidence is winning out for now,” said Jeremy Stretch, a senior currency strategist at Rabobank International in London. “That’s helping the euro.”

The euro rose 0.1pc to $1.3232 as of 10:31am in London after falling to $1.3115 yesterday, the lowest level since April 28, 2009.

The single European currency was little changed at 124.37 yen, from 124.32 yen yesterday in New York. The yen traded at 93.99 yen, from 94.03 yesterday.

Negotiations among the Greek government, the European Commission and the IMF “need to be sped up now,” Merkel said yesterday after meeting with IMF Managing Director Dominique Strauss-Kahn.

An index of executive and consumer sentiment in the 16 euro nations rose to 100.6 from a revised 97.9 in March, the European Commission in Brussels said today.

That’s the highest since March 2008, and exceeded the 99.4 median estimate of 24 economists in a Bloomberg News survey.

The number of people out of work in Germany declined a seasonally adjusted 68,000 to 3.29 million, the Nuremberg-based Federal Labour Agency said today.

The drop was the biggest since January 2008 and exceeded the decline of 10,000 that economists had forecast, based on the median of 30 estimates in a Bloomberg survey. The jobless rate fell to 7.8pc from 8pc.

Bloomberg

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