Japanese Yen soaring high against the EUR

Tuesday, March 9, 2010

After closing down against the USD, for the 6th time out the past seven weeks, the Euro appreciated against 11 of its 16 major currency counterparts in the forex online market following French comments that helped aid risk appetite. Following the meeting between the French President Nicolas Sarkozy and Greek Prime Minister George Papandreou, the French President reportedly vowed to help Greece if needed and pledged to crackdown on market speculators targeting the country. The EUR/USD, however, has been having rather mixed reactions and continues to remain within its consolidation phase as the highly traded pair has been unable to rise toward last Wednesday’s highs of 1.3735.

After meeting with both the German Chancellor and the French President, the Greek Prime Minister will travel today to Washington D.C to meet with President Barak Obama.

Yesterday morning, Germany announced that its industrial productions rose in January as energy output surged throughout the unseasonably cold winter, helping to offset a collapse in the construction activity. Germany’s recovery from the recession froze at the end of 2009 and the coldest winter in the past 14 years is not helping to heat up the country’s economic recovery. While Industrial Production came out below market expectations of 1.1%, the 0.6% rise between December and January indicates that Germany could be resuming its path towards economic recovery. The euro was little changed after the report and traded at $1.3654.

The Japanese Yen rose against the Euro, snapping a two-day drop, on speculation that Japanese companies are bringing home overseas earnings before the nation’s fiscal year ends this month. The Yen appreciated against all of its 16 major currency counterparts following China’s foreign-exchange regulator statement that speculative capital is flowing into the country, fueling optimism the funds will also boost neighboring economies. The Yen rose to 122.58 per Euro early this morning (6:38 GMT), from 123.13 per Euro in New York yesterday when it dropped to 123.90 per Euro, the weakest level since Feb. 23. Japan’s currency gained against the US Dollar, jumping from yesterday’s 89.99 to 90.31 this morning.

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