Euro lifted in Asia by France-Germany plan
SINGAPORE: The euro rose above $1.34 in Asia on Monday after France and Germany vowed swift action to shore up Europe's struggling banks, analysts said.
The single European unit bought $1.3450 in the morning compared with $1.3375 in New York late Friday, while it sat at 103.20 yen from 103.10 yen.
The greenback traded at 76.75 yen from 76.73 yen.
The euro fell below $1.34 late Friday after Fitch downgraded the ratings of Italy and Spain, citing increasing pressure on them as the eurozone debt crisis makes efforts to stabilise their public finances even more difficult.
But Emmanuel Ng, currency economist of OCBC Bank in Singapore, told the "market is attempting to push the euro higher against the dollar".
Ng stated that the euro rally was led by traders encouraged by a promise from German Chancellor Angela Merkel and French President Nicolas Sarkozy on Sunday promising action to recapitalise troubled lenders within weeks.
"I think it's just from the spillover from the weekend comments arising out of the Merkel-Sarkozy meeting so it's just newsflow regarding the potential (bank) recapitalisation plans," he said.
Without announcing concrete details about the plans, Sarkozy said there would be "lasting, global and quick responses before the end of the month", amid rampant fears of a crippling credit crunch.
The news could ease concerns over a lack of direction in the eurozone leadership as France and Germany, the two main powerhouses of the bloc, had been at odds over the best way to recapitalise the region's banks.
It also comes a few weeks ahead of a G20 summit in Cannes, at which Sarkozy said Europe must "arrive at the (meeting) united and with the problems resolved". (AFP)
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