Euro rises on positive German sentiment

Published: 25 Nov at 5 AM Tags: Euro, Dollar,

The euro bounced against the dollar after Germany announced a marked improvement in business sentiment. Also helping the single currency out of a two-year trough were comments by Bundesbank head, Jens Weidman, that the European Central Bank could face legal hurdles if it pushes ahead with plans to purchase government bonds.

ECB president Mario Draghi recently announced that measures could be introduced to help bolster the economy in the eurozone. The euro was up from a two-year low of $1.2358 to $1.2443. The common currency is also doing well against the yen and is up from 145.59 to 147.385 yen, close to the 149.12 yen six-year peak hit last week.

The dollar has slipped 0.3 per cent from 118.59 yen to 117.915. The yen has been struggling since last week’s surprise introduction of further stimulus measures by the Bank of Japan. Last week the dollar hit 118.98, the lowest the Japanese currency has been in seven years.

Elsewhere the Australian dollar has given up the recent gains provided by monetary easing in China. The relief has now given way to concerns about weakness in the world’s second biggest economy.

Last Friday’s interest rate by China, Australia’s top trading partner, saw the Aussie rise as high as $0.8723 before sliding to $0.8582.