Euro Strengthens After Draghi Says Currency Is Irreversible

26.07.2012 13:31

Bloomberg: The euro strengthened against the dollar for a second day after European Central Bank President Mario Draghi said policy makers will do whatever is needed to preserve the 17-nation currency.

Europe’s common currency rebounded from a drop of as much as 0.3 percent. “The ECB is ready to do whatever it takes to preserve the euro,” Draghi said during a speech in Londontoday. The dollar fluctuated between gains and losses versus the yen, and approached an almost eight-week low, before a report that economists said will show orders for U.S. durable goods slowed in June. A Credit Suisse Group AG unit cut its three- and 12-month forecasts for the euro versus the greenback.

The shared European currency jumped 0.5 percent to $1.2224 at 6:55 a.m. New York time. It fell to $1.2043 on July 24, the weakest since June 2010. The euro advanced 0.7 percent to 95.67 yen. The dollar was little changed at 78.20 yen, after falling to 77.94 yen on July 23, the least since June 1.

Credit Suisse’s private banking unit lowered its 12-month forecast for the euro to $1.18 from $1.23, citing pressure from negative core yields in Europe, according to an e-mailed report from the Zurich-based bank. The German two-year note yield was minus 0.067 percent today, below zero for the 15th straight day. Credit Suisse also cut its three-month forecast for the euro to $1.21 from $1.23.

The euro has dropped 4.7 percent in the past three months, according to Bloomberg Correlation-Weighted Indexes, the worst performance, along with the Swiss franc, among 10 developed- market currencies. The yen has gained 8 percent, and the dollar strengthened 3.9 percent.

To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh

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