Tuesday June 16, 05:58 PM
Euro firmer after German confidence data
LONDON (AFP) - The euro was firmer against the dollar on Tuesday after a sharp pick up in German investor confidence snapped a run of data that had pressured the eurozone currency, dealers said.
They said the euro may also have got some indirect support from a meeting of the top emerging economies -- Brazil, China, India and Russia -- which called for a "more diversified" global currency system.
"We believe it is very necessary to have a stable, predictable and more diversified currency system," said a final declaration at the end of the first ever summit of the so-called BRIC nations.
China and Russia in particular have criticised the dominance of the dollar as the single global reserve currency, with the worst global slump since the 1930s made worse as a result.
In late Tuesday trade in London, the European single currency climbed to 1.3887 dollars from 1.3793 dollars in New York late on Monday.
Against the Japanese currency, the dollar dropped to 96.24 yen from 97.83 yen on Monday.
The ZEW investor confidence index for June showed that the German economy, the biggest in Europe, could be past the worst of the crisis, jumping to a three-year high.
The ZEW index, which measures the confidence of financial markets players, soared 13.7 points from May to 44.8 points, compared with forecasts for a June reading of 37 points.
"June's sharper-than-expected rise in the German ZEW index confirms that a growing majority of investors expect economic conditions to improve," said Jennifer McKeown, European economist at the Capital Economics consultancy.
"However, the pick-up will clearly come from an extremely weak starting point," she said.
Daragh Maher of Calyon said the "broad run of macro-economic data which has generally confirmed that the global activity backdrop is getting worse less quickly."
On Monday, the euro had taken a beating on weak employment data in the eurozone and worries that the region's crisis-hit banks will suffer bigger-than-expected write-downs.
Earlier Tuesday, Japan's central bank left its key interest rate unchanged at 0.1 percent but upgraded its assessment of the world's number two economy for a second month in a row.
"Japan's economic conditions, after deteriorating significantly, have begun to stop worsening," the Bank of Japan said in a statement. "Japan's economy is likely to show clearer evidence of levelling out over time."
In late trade on Tuesday, the euro was changing hands at 1.3887 dollars against 1.3793 dollars late on Monday, at 133.65 yen (134.92), 0.8443 pounds (0.8455) and 1.5063 Swiss francs (1.5061).
The dollar stood at 96.24 yen (97.83) and 1.0848 Swiss francs (1.0920).
The pound was at 1.6451 dollars (1.6312).
On the London Bullion Market, the price of gold rose to 934 dollars an ounce from 932.25 dollars an ounce late on Monday.
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