The euro showed strength against its major counterparts in Asian deals on Tuesday as the Asian stocks rose after the U.S. Federal Reserve Chairman Ben Bernanke said Monday that he is hopeful the economy will gain traction and not fall back into a “double dip” recession.
U.S. Federal Reserve Chairman Ben Bernanke said the country’s recovery is likely to proceed at a moderate pace and is unlikely to bring down the unemployment rate quickly. “My best guess is we’ll have a continued recovery, but it won’t feel terrific,” he was quoted as saying in an interview with ABC News journalist Sam Donaldson at the Woodrow Wilson Center. Encouragingly, consumers and businesses are starting to take the baton to drive the recovery forward as government stimulus fades, Bernanke said.
Bernanke also discussed the sovereign debt crisis in Greece and expressed confidence that the European authorities could deal with the issue. He stated that the Fed was keeping a close eye on developments in Europe.
The euro plunged yesterday as investors dumped the risk-sensitive common currency as worries about a potential debt crisis in Hungary rekindled concerns over the fiscal health of the European Union.
Concerns over Hungary’s finances, stoked Friday by a Hungarian official comparing the country’s problems to those of Greece.
The euro rose against the Swiss franc in Asian deals on Tuesday and reached a high of 1.3900 at 11:35 pm ET. The next upside target level for the euro is seen at 1.3945. The euro-franc pair is currently worth 1.3895, compared to 1.3868 hit late New York Monday.
In Asian deals on Tuesday, the euro advanced against the pound. At 11:30 pm ET, the euro-pound pair reached 0.8265, up from yesterday’s close of 0.8237. The pair is currently worth 0.8260 with 0.830 seen as the next upside target level.
The euro edged higher against the currencies of US and Japan in Asian deals on Tuesday. Currently, the euro is worth 1.1980 against the dollar and 109.80 against the yen, compared to yesterday’s close of 1.1917 and 108.86, respectively. If the euro rises further, it may likely target 110.3 against the yen and 1.200 against the dollar.
On the economic front, Japan’s current account surplus rose 88% in April from a year earlier, the Ministry of Finance said today. The surplus in the current account stood at 1.242 trillion yen in April before seasonal adjustment, the data revealed. That was below expectations for a 1.3 trillion yen surplus following the 2.534 trillion yen surplus in March.
The trade balance came in at 859.1 billion yen, up 414.2% on year. That was slightly below forecasts for an 871.9 billion yen surplus after the 1.074 trillion yen surplus in the previous month.
Looking ahead, Japan’s Bankruptices data for May and the preliminary leading index for April are expected at 12:30 am and 1:00 am ET, respectively.
The Swiss unemployment rate and CPI for May, German trade balance and industrial production for April, French trade balance for April and the Bank of France business sentiment index for May are slated for release in the European session.
There are no important economic reports due to be released from the U.S. today.