Euro rises in Tokyo trade

Published October 30th, 2000 - 02:00 GMT

The euro rose against major currencies in Tokyo Monday on rumors the European Central Bank (ECB) was amassing a war chest to prop up the currency, a dealer said. 

 

The European single currency regained a level of $0.84 after earning further respite on data released late Friday that showed growth in the powerhouse US economy was slowing. 

 

The euro bought $0.8411 at 2:00 pm (0500 GMT), up from $0.8394 in New York and $0.8326 in Tokyo late Friday. 

 

"Investors bought the euro as they heard a rumor that the ECB might have sold US bonds to procure funds for joint intervention," Mizuho Trust and Banking dealer Kazuhiro Kaneko said. 

 

The euro was also benefiting from the impact of weaker gross domestic product (GDP) data released in the United States, Kaneko added. 

 

The world's biggest economy expanded by 2.7 percent in the third quarter, its slowest growth since the second quarter of last year. 

 

Singapore's DBS group added in a report that economic fundamentals and technicals were in favor of intervention to support the euro this week. 

 

"The fundamental gap between the US and euroland is closing on the back of a slowdown in the US," it said. 

Intervention would probably push the euro to 0.87-0.89 and "even without intervention the euro is likely to move higher to $0.85 this week," DBS said. 

 

Against the yen, the euro traded at 91.40, up from 91.25 in New York and 90.27 in Tokyo Fiday afternoon. 

 

The dollar meanwhile bought 108.65-68 yen, down from 108.72 yen in New York, but up from 108.43 yen in Tokyo late Friday. 

"There was no lead in dollar-yen trading, which is in a narrow trading range," said Fuji Bank dealer Hideyuki Tsukamoto.— (AFP)  

 

© Agence France Presse 2000  

 

© 2000 Mena Report (www.menareport.com)

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