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The Euro gains against the Greenback as Credit Suisse posts a profit

Thu, Apr 23 2009, 09:35 GMT
by Benny Menashe

Finotec Group Inc.  |  View company's profile

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The Euro gained against the dollar and the yen after Credit Suisse Group AG, the biggest Swiss bank by market value, said it returned to profit in the first quarter, spurring demand for higher-yielding currencies. The euro also advanced before European reports today that economists say will show manufacturing and service industries improved for a second month, adding to evidence the euro area’s recession is easing. “Asian stock markets, a gauge for risk aversion, rebounded following Credit Suisse’s earnings news,” Tomohiro Nishida, a foreign-exchange dealer at Chuo Mitsui Trust & Banking Co. in Tokyo. “The bounce back of stocks triggered buying of the euro and other higher-yielding currencies.” The EUR/USD is currently trading at $1.3020 as of 8:25am, London Time.

Sterling tumbled against the dollar on Wednesday after the UK government projected a massive increase in public debt and said it would increase taxes as it unveiled its budget. The pound was also weighed down as British finance minister Alistair Darling said a competitive exchange rate would help exporters. The UK currency came under pressure as concerns mounted over Britain's ability to service its debt as it tackles the worst economic downturn in more than 60 years. "The debt-to-GBP ratio is on the high side," said Geoffrey Yu, currency strategist at UBS in London, adding that this was putting selling pressure on sterling. The GBP/USD is currently trading at $1.4560 as of 9:00am, London Time.

The Australian and New Zealand dollars advanced on speculation signs of a thaw in credit markets will revive investors’ appetite for risk. The currencies reversed earlier declines against the U.S. dollar after Credit Suisse Group AG said it returned to profit in the first quarter. They weakened earlier as the International Monetary Fund said Australia’s and New Zealand’s economies will shrink in 2009. “We have started to see credit-market improvements and we have begun to see equity markets stabilizing,” said Sharada Selvanathan, a Hong Kong-based currency strategist at BNP Paribas SA, France’s largest bank. “Stabilizing conditions in Asia will support the Aussie and kiwi,” she said, referring to the currencies by their nicknames. The AUD/USD is currently trading at 0.7075 as of 9:15am, London Time.

Today's Economic Events

Published on  Thu, Apr 23 2009, 09:43 GMT

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