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Euro Bounces Back Against the Dollar

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After a 9-day low, the euro recovered against the dollar, following positive reports on Deutsche Bank. The gain came as fears over the fate of Deutsche Bank lessened, with hopes of a reduced fine from the U.S. government, more faith in the companies by hedge funds and ending speculation about the need for a bailout. The improvement on the euro put pressure on the yen and the Swiss franc. Deutsche Bank’s shares in the U.S. were up by 6.8 percent, after it hit a thirty-year low on Thursday. The euro had fallen to $1.1153 before the good news came in. The fears over Deutsche Bank also helped the dollar gain against the franc, to reach 0.9752. At the last count, the dollar was up 0.29 percent against the yen at 101.30 yen, down from the session high of 101.75.

The Japanese yen has had a strong run against the dollar, and is expected to close out the quarter up 1.9 percent. This would make it the third quarter in a row that the yen has improved against the dollar. The dollar index held steady at 95.505. The index measures the dollar’s performance against a basket of six major currencies. Euro’s gain may not be long-lived however, as the fears concerning Deutsche Bank could resurface. A hedge fund in Asia has pulled out $50 million from the bank over the past two days.

China’s yuan will officially join the U.S. dollar, the British pound, the euro and the Japanese yen as a global reserve currency on Saturday. The currency held at 6.6689 to the dollar.

 

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