SFC: Euro Trades Near Three-Month High on Worldwide Recovery Signs
Aug. 3 (Bloomberg) -- The euro traded near a three-month high against the dollar as signs a global recovery is gaining momentum fueled investor appetite for riskier assets.
The yen was close to an 11-week low versus the euro after commodity prices gained and a gauge measuring the cost of insuring against losses in the Standard & Poor's 500 Index slid to the lowest since May. Australia's currency was near the strongest since May versus the greenback before reports today that economists said will show retail sales rose for a fourth month and home-building approvals increased.
"With equities looking so strong and the volatility index having fallen back down, the risky currencies have room to fly," said Alex Sinton, a senior dealer in Auckland at ANZ National Bank Ltd., New Zealand's largest lender. "The downside on the euro is relatively limited."
The euro traded at $1.3178 as of 8:24 a.m. in Tokyo, from $1.3179 yesterday in New York, when it rose as high as $1.3195, the most since May 4. The single currency was at 114.10 yen from 114.00, after climbing to 114.74 on July 28, the strongest since May 18. The yen bought 86.59 per dollar from 86.50. Australian dollar traded at 91.36 U.S. cents after yesterday rising to 91.46, the highest since May 4.
The MSCI World Index of stocks advanced 2.4 percent yesterday as companies including HSBC Holdings Plc and BNP Paribas SA joined the 65 percent of corporations in the gauge that have topped earnings estimates this reporting season, data compiled by Bloomberg show.
The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500 dropped, for a third day yesterday. The VIX fell as low as 21.74, the least since May 3.
