By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — The euro recovered some ground against the U.S. dollar during Asian trading hours Monday, as the currency reacted positively to French and German assurances they will act to safeguard European banks.
The euro EURUSD +0.64% rose to $1.3452 — a gain of about 0.5% for first half of the Asian day, according to FactSet — as it bounced off $1.3401 reached in late North American trading Friday.
The gains came as German Chancellor Angela Merkel and French President Nicolas Sarkozy said Sunday they’ve reached an agreement to recapitalize beleaguered European banks, though details of the plan won’t be available until later this month. See report on French, German deal to support European banks.
The European currency had taken a wild ride on Friday, rising above $1.35 after a better-than-expected employment report eased global-growth concerns but then falling below $1.34 after Fitch Ratings downgraded the sovereign debt of Italy and Spain. See report on Friday’s forex moves.
The dollar index DXY -0.55% — which tracks the performance the greenback against a trade-weighted basket of six other major currencies — slipped to 78.447 from 78.660 late Friday.
Among other major currency pairs, the Japanese yen ticked higher, with the dollar USDJPY -0.09% slipping to ¥76.71 from ¥76.90 at the end of the previous week, with Japanese financial markets closed for Sports Day.
The British pound GBPUSD +0.19% added to its Friday gains, changing hands at $1.5612 from $1.5563 late Friday.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
