BLBG:Euro Strengthens as Optimism on Portugal, Greece Lifts Demand
The euro advanced for a second day against the dollar and yen amid speculation Portugal’s government is coming closer to agreeing on a budget and as euro- area finance chiefs prepare to hold a conference call on Greece.
The 17-nation currency rose against most of its major counterparts before Portugal’s parliament holds an initial vote on the 2013 budget proposal. The dollar dropped against all but two of 16 major peers tracked by Bloomberg after the Federal Reserve’s Narayana Kocherlakota said yesterday monetary policy is currently “too tight.” He spoke as the Northeast U.S. assesses the damage caused by the tropical cyclone Sandy.
“Positive news from the parliaments of Greece and Portugal, that could be supportive for the euro,” said Jane Foley, a senior currency strategist at Rabobank International in London. “The perception that the Fed could leave policy more accommodative for longer on the back of the rebuild because of the floods is also supportive. If it’s good for risk appetite, you could see it pushing the euro a little bit higher.”
The euro strengthened 0.3 percent to $1.2998 at 10:06 a.m. London time, after rising to $1.3014, the most since Oct. 25. It rose 0.5 percent to 103.72 yen. The Japanese currency weakened against the greenback, falling 0.2 percent to 79.79.
To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
