Positive economic data supported euro gains vs the US dollar yesterday, but the price has pulled back this morning

The single currency pushed higher once again as the greenback suffered from rising appetite in the wake of positive economic signs.

  • The dollar initially made after ECB President Trichet said that the US government and the Federal Reserve should pursue policies supporting a strong dollar and that excessive foreign-exchange volatility is an “enemy.”
  • However the euro trimmed its losses in the afternoon following positive US data, which bolstered expectations that the economy is recovering.
  • US jobless claims beat market forecasts dropping a further 10K week-on-week. The US CPI figure also rose marginally to 0.2%, supporting growing optimism over the economic recovery.
  • The greenback also suffered after both Goldman Sachs and Citigroup reported better-than-expected earnings in the third quarter.
  • Goldman Sachs posted a net income of $5.25 a share, compared with the average estimate of $4.18 a share, and profits for the period were $3.19bn, a four-fold increase from the same period in 2008.
  • In trading this morning the euro has slipped back slightly but the price remains at near 14-month highs, hovering just above 1.49.