Euro hits 1-month high vs dollar after debt sales

January 16, 2011 | 08:00

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The euro picked up more ground on the dollar Friday, sustaining a five-day march upward on the back of cautiously renewed confidence in the European economy.

The euro rose to $1.3382 in New York trading at 2200 GMT, from $1.3358 a day earlier.

The dollar gained on the yen, however, rising to 82.94 yen against 82.79 yen on Thursday.

The euro rose as far as $1.3457 Friday, its highest level in a month, before pulling back slightly.

The European currency's rise marked a strong week-long recovery from the close of $1.2912 last Friday, and came after a series of successful debt auctions by Spain, Italy and Portugal during the week.

"The US dollar dropped sharply against the euro on the heels of strong sovereign debt auctions and rhetoric from the European Central Bank," said analyst David Rodriguez at trading site DailyFX.

"A lull in market jitters over the stability of the eurozone suggests that the euro could continue to retrace losses against the safe-haven US dollar."

It also got a boost from the top European central banker, Jean-Claude Trichet, who hinted Thursday that he would take a tough stance against inflation, even as the bank kept its interest rates unchanged.

"The euro has seen a remarkable turnaround this week. Yesterday’s comments from the ECB President Trichet were seen as a shift to a more hawkish stance," said Vassili Serebriakov, currency strategist at Wells Fargo Bank.

The pound also pulled up against the dollar, going to $1.5866 from $1.5834 a day earlier.

The dollar also fell marginally against the Swiss franc, dropping to 0.9633 francs from 0.9635.

AFP

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