Tuesday 25 September 2018

Euro back in focus after hitting three-year high against the dollar

(stock photo)
(stock photo)

After hitting a three-year high against the dollar, the strong euro is likely to preoccupy global markets and European Central Bank policymakers in particular in the coming week.

The ECB governing council meets on Thursday. It last expressed concern over the single currency in September, when it said exchange rate volatility was an uncertainty that required "monitoring". Then the euro had only briefly nudged beyond $1.20. In Dublin bank shares gained yesterday. AIB closed up 4.4pc and Bank of Ireland ended the session up 3.4pc.

Shares in Independent News & Media (INM) closed up more than 6.25pc, reversing early gains after the company announced chairman Leslie Buckley's plans to stand down, and named four new directors.

Elsewhere, European shares rose to highs not seen since 2008 as growing confidence in corporate earnings and in the strength of the global economy continued to fuel a bull market, which shrugged off fears of a possible US government shutdown.

The Eurozone's STOXX benchmark index closed up 0.73pc at 402.95 points, its highest level in 10 years.

"In 2017 we were in a catch-up phase and now we are going beyond", said Philippe Waechter, chief economist at Natixis AM, commenting on the strength of Eurozone shares.

The European results season shifts into gear next week with equity valuations at their highest in more than a year and investors betting that the engine of earnings upgrades has plenty more fuel in the tank.

Reuters / Irish Independent

Irish Independent

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