Euro Climbs In Thin Christmas Eve Deals

25 Dec

LONDON: The euro advanced slightly against the US dollar in thin Christmas Eve holiday trading on Friday, with several markets already closed for the festive period.

In late morning deals, the European single currency rose to 1.3128 dollars, compared with 1.3117 late in New York on Thursday, when it had fallen to close a one-month low at 1.3055.

A number of financial markets were closed on Friday, most notably in Germany, Switzerland and the United States.

“With much of Europe and the United States out on holiday, and with absolutely nothing of note on the calendar, the night was quiet and the day ahead is likely to be the same,” said RBC Capital Markets currency analyst Elsa Lignos.

Major market moves were seen as unlikely with many investors already on year-end holidays, analysts said.

The euro appeared to shrug off Thursday's news that Fitch had cut Portugal's debt rating, citing concerns that the eurozone member could slip into recession.

“With no data out at all today to move the markets and activity levels likely to be very low with the US closed, the markets are likely to be at a standstill until next Wednesday for the run up to the New Year,” said Investec Treasury Solutions in a research note.

The US dollar had lost ground against key currencies on Thursday after China pledged to back eurozone countries struggling with massive debt.

China on Thursday pledged to back debt-ridden European countries as they struggle to avoid bankruptcy following Greece and Ireland, offering optimism amid grave concerns about the future of the eurozone.

“We are ready to support the eurozone countries to overcome the financial crisis and realise economic recovery,” foreign ministry spokeswoman Jiang Yu told reporters.

“In the future, the European Union will be one of the major markets for our forex investment,” he said.

China has emerged as a key player in the European debt crisis. Beijing has the world's largest foreign exchange reserves at 2.65 trillion dollars, a significant portion of which is invested in the euro.

In London on Friday, the euro changed hands at 1.3128 dollars against 1.3117 dollars late in New York on Thursday, at 108.84 yen (108.79), 0.8496 pounds (0.8502) and 1.2617 Swiss francs (1.2576).

The dollar stood at 82.90 yen (82.94) and 0.9611 Swiss francs (0.9587).

The pound was at 1.5452 dollars (1.5424).

On the London Bullion Market, the price of gold rose to 1,383.15 dollars an ounce from 1,373.50 dollars late on Thursday.

– AFP/de

Channel News Asia

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