Thu, 30 Sep 2010 00:00:00 +0200

EUR Strongly Advances against Dollar

The EUR strengthened against most of the major currencies yesterday as gains in commodities prompted investors to wade into riskier currency trades. The 16 nation currency extended gains to hit a fresh five-month high against the dollar and closed at around 1.3630. The EUR experienced similar behavior against the JPY as the pair rose from 113.45 to 114.15 by days end. At the same time, the UK pound was near its weakest in more than four months against the EUR, as a report showed U.K. mortgage lending fell for a fourth month in August, adding to signs the recovery is faltering. The British currency slipped for a second day versus the EUR and closed around 0.8620. Lenders granted 47,372 loans to buy homes, compared with a revised 48,346 in July, the Bank of England said today in London. Economists forecast that approvals would decrease to 47,000 from an initially reported 48,700 in July. The British currency was close to its strongest versus the dollar in six weeks on speculation the Federal Reserve will loosen monetary policy to shore up growth. Looking ahead to today, the Euro-Zone and Britain are set to publish a number of important data releases. These include the British Nationwide HPI at 6:00 GMT and the German Unemployment Change at 7:55 GMT. These figures are likely to determine the GBP and EUR's strength going into the end of this week's trading.

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