RTTN:Euro Rises To Multi-day Highs Against Dollar, Yen And Pound
(RTTNews) - The euro rallied against its major rivals in early deals on Tuesday as European equities rose on news that European leaders are making some progress toward implementing tougher budget rules across the eurozone.
Hopes for further monetary easing by China and fourth quarter corporate earnings expectations also helped revive appetite for risky-buying.
German Chancellor Angela Merkel and French President Nicolas Sarkozy, who met in Berlin yesterday, promised quick action to stem the debt crisis while warning Greece that it needed to move forward with promised structural changes and deeper spending cuts to avoid a disorderly default.
In the unofficial kickoff to U.S. earnings season, aluminum producer Alcoa posted its first quarterly loss in more than two years, but said it expects global aluminum demand to grow 7 percent this year. It has also forecast a global deficit in primary aluminum supply.
Meanwhile, the Eurozone is set to face a shallow recession in 2012 as tough austerity measures continue to bite and consumer confidence remains weak, Group Managing Director and Head of Fitch's Sovereign Group, David Riley said at an event on Tuesday.
"With Eurozone countries needing to borrow approximately two trillion euros in 2012, the sovereign credit and economic challenges the region faces this year are underlined by the fact that more than half of that debt is by governments at risk of rating downgrades," added Riley.
The European currency touched a 5-day high of 0.8280 against the pound around 5:20 am ET, having advanced from yesterday's fresh 16-month low. The euro-pound pair is presently worth 0.8278 with 0.8310 seen as the next likely resistance level.
The U.K. recovery is stalling, but the situation is better than those seen in the worst phase of the last downturn, according to Quarterly Economic Survey (QES) from the British Chambers of Commerce.
The survey results suggests that the economy is set to stagnate overall until mid-2012, with one quarter likely in negative territory. But the results do not indicate a recession, data showed today.
The single currency also rose to 4-day highs of 1.2810 against the US dollar and 98.45 against the yen around 5:50 am ET. The euro thus recovered from Asian session's fresh 11-year low of 97.31 against the yen and yesterday's 16-month low of 1.2667 against the greenback.
On the upside, the single currency may find target levels at 1.2940 against the greenback and 99.0 against the yen.
The common currency that reached a fresh multi-month low of 1.2108 against the Swiss franc in the Asian session rebounded to 1.2139 around 5:25 am ET. The euro-franc pair is presently worth 1.2130 with 1.2160 seen as the next likely resistance level in the near-term.
(RTTNews) - Investors now focus on a meeting between German chancellor Angela Merkel and the International Monetary Fund's managing director Christine Lagarde later in the day in Berlin.
The U.S. wholesale inventories report for November is slated for release in the New York morning session.
