Euro, yen gain as markets tumble

December 11, 2014 | 10:44

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The euro returned to above the US$1.24 mark, while the dollar fell to below 118 yen, having touched 121.82 on Monday.

Euro and Dollar (AFP)

NEW YORK: The euro and yen gained against the dollar on Wednesday (Dec 10) as global capital markets tumbled amid a rise in investor nervousness.

The euro returned to above the US$1.24 mark, while the dollar fell to below 118 yen, having touched 121.82 on Monday.

"Swelling risk appetite - embodied by a relentless push upward by the S&P 500 - and a firming US dollar have been the defining market themes in 2014," noted Ilya Spivak, currency strategist at DailyFX.

"Profit-taking on these trades ahead of the calendar turn to 2015 would imply a parallel downturn in the greenback and the benchmark stock index."

Boris Schlossberg of BK Asset Management said the yen's rebound on the dollar was just an example of more volatility to come.

As the Federal Reserve moves closer to raising interest rates, the spread between US Treasury and Japanese government bonds will grow and "almost certainly increase the average daily range of the pair as it continues to attract more and more speculative flows," he said.

AFP

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