BLBG: Euro Gains Against Dollar, Yen as ECB Rate-Cut Bets Increase
By Andrew Macaskill
Nov. 20 (Bloomberg) -- The euro rose against the dollar and the yen as U.S. stock futures pared their declines and traders added to bets policy makers will cut interest rates to limit the worst effects of the recession.
The common currency strengthened most versus the South Korean won, the Australian dollar and British pound as Standard & Poor’s 500 Index futures recovered and the Swiss National Bank unexpectedly reduced its key interest rate to 1 percent. The won tumbled today to the lowest level in more than 10 years.
“The euro advance has been triggered by the bounce in the U.S. equity futures after the SNB cut,” said Adam Cole, the head of global foreign-exchange strategy in London at Royal Bank of Canada. Currencies “are taking their lead from stock movements at the moment,” he said.
The euro climbed to $1.2532 as of 7:41 a.m. in New York, from $1.2489 yesterday, and to 119.72 yen, from 119.55. The yen rose to 95.47 per dollar, from 95.73.
S&P 500 index futures were down 1 percent. They dropped 2.2 percent earlier after minutes of the Federal Reserve’s meeting last month, released yesterday, showed policy makers predicted the U.S. economy will contract through mid-2009.
The yield on the Euribor interest-rate futures contract expiring in December extended declines after the SNB rate reduction, falling 17 basis points to 3.31 percent.
To contact the reporter on this story: Andrew Macaskill in London at amacaskill@bloomberg.net
