Comments from European officials lift euro

17:11, May 22, 2010      

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The euro rose against the dollar on Friday in volatile trading after some top European officials said the single currency is not in danger.

The euro jumped higher in Asian trading hours on Friday, touched a session high of 1.2670 dollars before tumbling. It fluctuated in New York trading as investors were concerned about the Europe debt crisis.

The euro is not in danger and remains a credible currency, European Central Bank (ECB) President Jean-Claude Trichet told German newspaper Frankfurter Allgemeine Zeitung.

"Market movements are always a combination of the mood of investors and the influence of speculative investors like hedgefunds," Trichet said. He refused to comment on possible foreign exchange intervention to support the euro.

ECB Executive Board member Juergen Stark said on Friday that the euro is not weak and the ECB's decision to buy eurozone government bonds did not mean a loosening of monetary policy.

"It is not the case that we have a weak euro at the moment, the purchasing power of the euro is secured and will remain so," Stark said.

The German parliament approved the country's share of the 750 billion euros rescue package to tackle debt crisis. German Finance Minister Wolfgang Schaeuble said that the rescue is in the German national interest.

European finance ministers met Friday in Brussels to discuss the debt crisis. EU President Herman Van Rompuy said the ministers agreed to four goals, including stricter enforcement of budget discipline rules, improving the competitiveness of weak economies, establishing a permanent safety net for troubled states and simplifying the economic decision-making process for members and the European Commission.

The euro has been rising in the past sessions as investors speculated that the ECB would intervene currency market. It could resume fall next week when the speculations fade, analysts said.

The euro bought 1.2570 dollars in late New York trading compared with 1.2509 dollars it bought late Thursday. The pound rose to 1.4482 dollars from 1.4403 dollars.

The dollar fell to 1.0592 Canadian dollars from 1.0678 Canadian dollars, and fell to 1.1490 Swiss francs from 1.1497 Swiss francs. It rose to 89.98 Japanese yen from 89.75 Japanese yen.

Source: Xinhua


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