The fastest convergence in short-term interest rates in almost a year is making the euro a surprise addition to currencies used to finance investments in higher- yielding assets.
he U.S. dollar rose on its European rivals on Thursday in New York as uncertain global stocks reduced risk appeal. The dollar approached the yearly highs seen last week against both the euro and sterling. A better than expected jobs report also provided a boost to the greenback.
The euro fell for a third day versus the dollar as Portugal announced deficit-cutting measures that will extend until the end of 2011, spurring concern that fiscal tightening across Europe will limit economic growth.EURUSD Comment: In case anyone hasn’t noticed yet, the Euro is a weak currency (now along with the yen as well as the US dollar). It is still struggling under a large Ichimoku ‘cloud’, under the 9 and 26-day moving averages, but with another potential small ‘spike low’.
The euro may rally above $1.35, a level last reached almost two weeks ago, on speculation the bailout of Greece will bring more stability to Europe than many investors anticipate, according to Citigroup Inc.
The euro dropped today as the doubts arouse that Greece won’t receive the €110 billion aid package, which are supposed to be provided by the European Union governments and the International Monetary Fund.
Greece called for activation of a financial lifeline of as much as 45 billion euros ($60 billion) in an unprecedented test of the euro’s stability and European political cohesion.
