RTTN: Euro Rebounds Versus Dollar, Extends 6-month High
(RTTNews) - The euro resumed its upward move against the dollar on Tuesday, matching its highest level since January in the wake of an unexpectedly interest rate reduction in Japan.
The Bank of Japan's decision to lower rates to zero and prep for more asset purchases bolstered global stocks and increased speculation the Federal Reserve will embark on another round of quantitative easing sooner than later.
With risk appetite picking up, the euro jumped to $1.3817 against the dollar, erasing yesterday's losses to equal March's 8-month high. Back in June the euro touched a 4-yea low near $1.1805, but has since rallied on easing concerns about Europe's sovereign debt situation.
The U.S. non-manufacturing growth sped up last month more quickly than economists had expected, according to an industry report Tuesday. The Institute for Supply Management said its services index rose to 53.2 in September from 51.5 in August.
The euro remained steady versus the yen, holding just below Y115. Earlier this week, the euro touched a 4-month peak of Y115.41, having moved away from a 9-year low of 105.41 set back in August.
Meanwhile, the euro jumped to a monthly high of 1.4372 versus the aussie buck, after the Australian central bank surprisingly retained its key interest rate at 4.5 percent. The markets were expecting a modest rate hike.
Eurozone retail sales fell 0.4% in August from July, Eurostat said on Tuesday. Economists had expected retail sales to grow 0.2%, following a 0.1% rise in July.
Growth of business activity in the Eurozone private sector slowed to a seven-month low at the end of the third quarter, survey data from Markit Economics showed Tuesday.
The final composite output index dropped to 54.1 in September from 56.2 in August.
