Euro gains on Spain recession exit
AFPTOKYO--The euro rose Thursday as news that Spain exited recession boosted hopes for the battered eurozone, while the dollar faced headwinds over speculation the Fed would delay its monetary easing drawdown.
October 25, 2013, 12:27 am TWN
The single currency hovered near two-year highs on the dollar at US$1.3786, up from US$1.3775 in New York on Wednesday, while it rose to 134.21 yen, from 134.10 yen.
The dollar fetched 97.34 yen, against 97.32 in New York, after HSBC said China's manufacturing activity expanded at its strongest pace in seven months in October, boosting risk sentiment.
“The outcome reversed a falling momentum just ahead of the” data, a senior dealer at a major bank in Tokyo told Dow Jones Newswires.
Weak U.S. jobs data earlier this week has stoked speculation the Fed would hold off reeling in its US$85 billion-a-month bond buying plan until at least early next year, a move that is negative for the dollar.
The figures came after a two-week government shutdown and narrowly averted debt default had thrown the U.S. unit into a freefall, benefiting the euro and yen.
Euro sentiment won support from rising consumer confidence figures and after Spain's central bank said Wednesday that the country had inched out of its two-year recession with timid growth in the third quarter — fuelling fragile hopes of a broader eurozone recovery.
Also Wednesday, the European Central Bank geared up for a year-long audit of the strength of big eurozone banks to withstand crisis, sniffing out risky loans and assets.
The dollar was mixed against other Asia-Pacific currencies.
It rose to 43.11 Philippine pesos from 43.07 pesos on Wednesday, to 31.13 Thai baht from 31.09 baht, and to 11,265 Indonesian rupiah from 10,818 rupiah.
The greenback fell to 1,055.50 South Korean won from 1,056.90 won, and to SG$1.2374 from SG$1.2392. It was flat at 61.53 Indian rupees.
The Australian dollar edged down to 96.49 U.S. cents from 96.54 cents, while the Chinese yuan was at 15.99 yen against 16.00 yen.