Euro advanced against the greenback, buoyed by a relatively upbeat ECB rate statement

The single currency climbed to a two week high of 1.4815 yesterday as investors continued to sell the dollar to fund riskier trades.

  • The single currency returned to its recent upward trend, initially climbing half a percent, as investors took up dollar selling in the wake of further evidence of global economic recovery.
  • Australian employment data revealed a rise in jobs in September, reinforcing risk appetite and triggering broad dollar selling as its haven appeal weakened.
  • The single currency held its gains in the afternoon after the European Central Bank left interest rates unchanged at a record low 1.0%, as the market expected.
  • In his following statement, the ECB President, Jean-Claude Trichet told reporters that “the euro-area economy is stabilizing and is expected to recover at a gradual pace.”
  • Additionally, Trichet was not as forceful about the need for a strong dollar as many had expected him to be, allowing the single currency to close up at 1.4793.
  • The single currency has trimmed its position in trading this morning, after Ben Bernanke indicated that US monetary policy may have to be tightened as a recovery takes hold.