Friday April 24, 03:21 PM
Euro climbs as German business confidence recovers
LONDON (AFP) - The euro climbed against the dollar on Friday as investors welcomed news that German business confidence rebounded in April, while the greenback was hindered by US auto sector concerns.
Sterling sank under 1.47 dollars after news that the British economy plunged deeper into recession in the first quarter of 2009.
In London morning trade, the European single currency climbed to 1.3299 dollars from 1.3144 dollars late in New York on Thursday.
Against the Japanese currency, the dollar sank to 97.00 yen from 97.95 yen on Thursday.
Germany's key Ifo business confidence index on Friday offered a small ray of hope for the recession-struck eurozone powerhouse.
After quizzing 7,000 German companies in manufacturing, construction, wholesaling and retail, the Ifo institute said its closely-watched indicator rose to 83.7 points in April, from an all-time low of 82.2 points in March.
The gain was significantly better than analysts surveyed by Dow Jones Newswires had expected. They were anticipating a much smaller rise to 82.3 points.
"The better-than-expected Ifo comes on the heels of more positive ZEW and PMI, which taken together give a considerable boost to euro," said analyst David Morrison at spread-betting firm GFT in London.
"The euro has had a grim month so this is a welcome reversal. However, traders will be wary of chasing the unit too far and too fast, given the uncertainties surrounding individual member states."
Economists see the Ifo index as a key leading indicator to gauge the future health of the economy. It has been falling steadily -- with occasional blips -- since June 2008 as sentiment among corporations plummets.
The euro was boosted Thursday by news that the eurozone's purchasing managers' index (PMI), compiled by data and research group Markit, rose to 40.5 points from 38.3 points in March, according to a first estimate.
And earlier this week, Germany's ZEW economic sentiment index showed a positive reading for the first time since July 2007, pointing to a pick-up in Europe's biggest economy in the second half of 2009.
Investors also sold the dollar on Friday after the Wall Street Journal reported that US automaker Chrysler was preparing to file for bankruptcy protection as soon as next week, while General Motors (NYSE: GM - news) may follow in May, dealers said.
British gross domestic product (GDP) meanwhile contracted by 1.9 percent on a quarterly basis compared with a decline of 1.6 percent in the last quarter of 2008, official data showed, marking the worst performance in almost 30 years.
In London trade on Friday, the euro was changing hands at 1.3299 dollars against 1.3144 dollars late on Thursday, at 128.48 yen (128.75), 0.9059 pounds (0.8927) and 1.5108 Swiss francs (1.5120).
The dollar stood at 97.00 yen (97.95) and 1.1406 Swiss francs (1.1503).
The pound was at 1.4626 dollars (1.4721).
On the London Bullion Market, the price of gold increased to 911.29 dollars an ounce from 897.50 dollars an ounce late on Thursday.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
