Wednesday, 9 Feb 2011

EUR Up as China Rate Hike Impact Lower than Expected

The euro rose against the dollar and yen in Asia this morning as investors bought back the unit once it became apparent that China's interest rate hike on Tuesday had only a limited impact on regional share markets.

When shares fall, the euro often follows suit, so investors tend to decease their holdings of the currency when share declines are expected. But investors bought back the euro after the limited declines in regional share markets became apparent.

In other news, the Australian dollar (AUD) was close to a 1-month high against the greenback after a private report showed the nation's consumer confidence rebounded this month. The AUD, also known as the Aussie, was at $1.0147 from $1.0146 after reaching $1.0200 on Feb. 4, the highest since Jan. 3.