| Home Page
News You Can Use
Euro Attempts Small Rebound on Dollar
Reuters
Thursday, February 19, 2004; 4:16 AM
By Charlotte Cooper
LONDON (Reuters) - The euro attempted a small rebound on the dollar on Thursday after the previous day's two cent fall from a record peak but the market was trying to gauge if the single currency's rally was due a bigger pause.
The dollar staged a strong recovery on the euro, yen and Swiss franc on Wednesday, partly helped by warnings from European politicians about the euro's strength.
Suspected intervention from the Bank of Japan in early Asian trade on Thursday also served to support the reversal although by the European open the greenback was below the highs it had set by the New York close.
"Everyone was taken by surprise by the sharp correction of the dollar and snowballing closing of short dollar positions," said Niels Christensen, currency strategist at Societe Generale in Paris.
"The market is still shell-shocked and it needs to find its feet."
By 3:45 a.m. EST the euro had recovered a third of a percent from its closing levels to $1.2715 but was still two cents below a record high of $1.2927 set early on Wednesday.
The dollar was a shade lower on the day at 106.70 yen having rallied by more than one yen on Wednesday from near three-year lows. Some said they thought the dollar reversal had begun in dollar/yen, possibly with the help of well-disguised Japanese intervention, and then spread to other dollar pairs.
EURO TALK
On Wednesday, French President Jacques Chirac said the euro zone seemed to be bearing the brunt of currency market volatility and German Economy Minister Wolfgang Clement said he had a level in mind at which the European Central Bank should halt the euro's rise against the dollar.
Continue with:
| 
