Thursday, 16 Dec 2010

EUR Stronger Ahead of EU Summit

The euro edged higher on Thursday ahead of a European Union summit but was vulnerable to a sell-off on lingering euro zone peripheral debt concerns, while the dollar fell after a pause in U.S. Treasury yield gains.

European leaders sought to paper over deep divisions on how best to resolve the debt crisis ahead of a summit on Thursday, and Spain and Portugal came under renewed pressure to get their finances in order.

Euro zone policymakers are toying with a number of ideas to fall back on if moves to create a permanent European Stability Mechanism for solving debt crises fail to calm financial markets next year.

The euro was up 0.2 percent at $1.3240 EUR= after falling more than 1 percent on Wednesday. Traders said bids from Asian central banks were seen around $1.3200, and on the charts support is seen around $1.3165, the low hit on Nov. 9.