The euro hit a three-month high against the dollar on Thursday,
drawing further support from a sustained surge in eurozone government
bond yields that again kept global stock markets on the defensive.
Investors
digested figures from the previous day that showed relatively strong
eurozone economic growth in the first quarter, contrasting with
disappointingly weak US retail sales in April.
The euro rose above $1.14, bringing its gains against the US currency in the last month to nearly 9% as the difference between benchmark US and eurozone 10-year yields shrinks from the euro-lifetime high touched in March.
European stock markets were a sea of red on Thursday, with investors worried about volatility and the tightening of financial conditions resulting from the plunge in bond prices and spike in yields.
Asian stocks
ex-Japan were broadly flat while Japan's Nikkei 225 index fell 1%,
weighed down by the yen's strength against the sagging dollar.
"The euro is continuing to rebound, supported by the ongoing adjustment higher in eurozone yields. (This)... is in part supported by strengthening growth in the euro zone and higher inflation expectations," said Lee Hardman, currency strategist at BTMU in London.
The euro was up more than 0.5% on the day at $1.1415 , as the US-German 10-year yield spread narrowed to a three-month low of 152 basis points. In mid-March, the yield advantage in favour of the dollar was over 190 basis points.
This pulled the dollar index, a measure of its against a basket of six currencies, down to a four-month low of 93.175 .With higher US interest rates seeming ever more distant, investors bailed out of long dollar positions, taking the index's losses to around 7% from a 12-year peak of 100.390 set in March.
The euro rose above $1.14, bringing its gains against the US currency in the last month to nearly 9% as the difference between benchmark US and eurozone 10-year yields shrinks from the euro-lifetime high touched in March.
European stock markets were a sea of red on Thursday, with investors worried about volatility and the tightening of financial conditions resulting from the plunge in bond prices and spike in yields.
"The euro is continuing to rebound, supported by the ongoing adjustment higher in eurozone yields. (This)... is in part supported by strengthening growth in the euro zone and higher inflation expectations," said Lee Hardman, currency strategist at BTMU in London.
The euro was up more than 0.5% on the day at $1.1415 , as the US-German 10-year yield spread narrowed to a three-month low of 152 basis points. In mid-March, the yield advantage in favour of the dollar was over 190 basis points.
This pulled the dollar index, a measure of its against a basket of six currencies, down to a four-month low of 93.175 .With higher US interest rates seeming ever more distant, investors bailed out of long dollar positions, taking the index's losses to around 7% from a 12-year peak of 100.390 set in March.
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