Stock Market Watch

Forex Market Update: Euro Pares Gains Against Dollar

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The euro pared most of its gains against the U.S. dollar in mid-day trading on Monday. The single currency also shed most of its gains against the Japanese yen. The yen, meanwhile, slipped against the dollar.

The euro had edged higher earlier in the day after poll results from Italian election showed that the center-left coalition was leading. The initial exit poll results eased concerns over a hung parliament in Italy. However, latest poll results showed Silvio Berlusconi’s center-right coalition extending its lead in the Senate race. A hung parliament in Italy could derail the country’s reform process, which was put in place by Mario Monti’s technocratic government.

Given the uncertainty in the euro zone, the euro pared most of its initial gains against the dollar and the yen. At last check, the single currency was trading 0.1% higher at $1.3204. Earlier in the day, it had hit a session high of 1.3318 against the greenback. Against the yen, the euro was up 0.5% to 123.74, at last check, well off the session highs of 125.25 yen.

The yen, meanwhile, came under pressure after reports that Shinzo Abe, Japan’s Prime Minister, is expected to nominate Haruhiko Kuroda as the next governor of the Bank of Japan (BOJ). Kuroda, who is the President of Asian Development Bank, is a strong supporter of aggressive monetary policy easing measures.

Speaking to Reuters, Omer Esiner, Chief Market Analyst at Commonwealth Foreign Exchange, said that the news all but ensures that BOJ will continue on an expansionary path of monetary easing to kick start the world’s number three economy, and consequently, the yen remains vulnerable to continued losses across the board.

At last check, the dollar was trading 0.7% higher at 94.08 yen. Earlier in the day, the greenback hit a 33-month high of 94.76 against the Japanese currency.

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edliston
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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