By: Barbara Zigah
A relief rally in Asia drove the Euro to a 7-week peak in early trading, though the single currency has since beat a slight retreat. Yesterday, the Eurozone’s leadership announced plans that would go a long way to resolving the crisis plaguing the area. Markets were buoyed by the news, and equity markets worldwide saw huge gains. The deal, which included a 50% haircut for Greek bondholders and a way to leverage the emergency bailout fund, still needs to be fine tune, but investors were more than satisfied with the plan in the current form.
As reported at 2:17 p.m. (JST) in Tokyo, the Euro was trading against the greenback at $1.4171, slipping 0.1% from the 7-week peak of $1.4248. Analysts are expecting that there might still be more gains that could be eked out. Other higher risk currencies also benefited from the risk rally, with the Australian Dollar surging yesterday to $1.0753; it has since retreated to $1.0665, a decline of 0.4%.
The U.S. Dollar was under early pressure; and the U.S. Dollar Index, a gauge of the currency’s value relative to a basket of major currencies, was recently trading at 75.028 .DXY, falling from Thursday’s high of 76.299 DXY.