Chinese Government Supports E.U. Efforts, Drives Euro Higher
DailyForex.com
The common currency reversed positions against the U.S. Dollar and the Japanese Yen in the Asian trading session when one official from the Chinese government endorsed the efforts being undertaken by the European Union to stabilize Eurozone financial markets. As reported at 1:49 p.m. (JST) in Tokyo, the Euro traded against the greenback at $1.3194, a session high; on Monday, the Euro struck a 2-week low. Against the Japanese Yen, the Euro was trading at 110.18 Yen, up from 109.90 Yen earlier.
At the opening ceremony of a trade talks between the E.U. and China, Wang Quishan, the Chinese Vice Premier, commented that the Chinese government supported the E.U. in their endeavors to contain the sovereign debt crises within the Eurozone. Traders also say that, implicit in his message, China may consider increasing purchases of Eurozone debt for their foreign reserves; whether or not that message truly implied impending purchases, the Euro moved higher in the thin trading session.
In Japan, as analysts had earlier expected, the central bank there declined to take any actions toward further stimulating the economy. While the Yen’s appreciation at one point had raised speculation that further stimulus would be forthcoming, the recent fallback in the price of the Japanese currency has temporarily put that need to rest. For the time being, according to one analyst, the chances are low that the Yen will appreciate too much given the relatively positive economic indicators in the U.S.