The Euro enjoyed fresh highs against both the U.S. Dollar and the Japanese Yen, getting a boost from comparatively favorable monetary policy from the European Central Bank as well as unexpectedly improved trade data from China which gave a boost to risk-related currencies. According to one FX strategist in New York a combination of factors is supporting the risk-on crowd, including last week’s improvement in U.S. labor data, which when combined with the upbeat Chinese report that showed November exports rising above the consensus estimates, suggests that growth on a global basis might be more robust than initially perceived.
As reported at 10:15 a.m. (JST) in Tokyo, the EUR/USD was trading at $1.3739, a gain of 0.26% and approaching October’s peak of $1.3832 which was also the high for the year. The EUR/JPY hit a 5-year peak at 141.93 Yen, a gain of 0.62% during the trading day. Even a decline in industrial output in Germany and a fairly steep fall in the Sentix Sentiment reading (from 10.3 to 8) failed to scatter Euro investors.
Growth Drivers Support Euro
Analysts believe that the positive news emanating from China and the U.S. could ultimately help to act as the driver for global growth which could give the Eurozone’s economy a much needed boost. Analysts are expecting to see greater demand for the Euro given the yield variable, with hedge funds likely buying the majority of the common currency.