–The Euro...The New World Currency?

Euro hit 2-year high against dollar
By Neil Dennis

The euro crept closer to its all-time high against the dollar, extending its two-year peak as stock markets steadied after Thursday's anxious session.

Comments from Axel Weber, the German central banker and member of the European Central Bank's governing council, helped spur the single currency along. He mentioned an "extremely positive" outlook for the eurozone and added there were price risks in the medium term that needed to be countered.

Against the dollar, the euro climbed 0.2 per cent to $1.3637 a new two-year peak and less than half a cent from a new record.

Most notably, the yen was back under pressure after the previous session's rally ran out of steam.

On Thursday, the yen rallied against most major currencies as concerns over China's rapid rate of economic growth prompted a scaling back in riskier strategies, which drove equity markets lower and encouraged profit taking in carry trade positions.

Michael Metcalfe at State Street said a degree of market anxiety was understandable given only two months had passed since "China Tuesday" on February 27 when global markets suffered a three-week period of volatile trading after China's stock market fell 8 per cent in one session.

As equity markets steadied on Friday however, appetite for risk returned. "As in February the latest wobbles will likely prove buying opportunities for risk assets," Mr Metcalfe added.

The euro climbed 0.2 per cent against the yen to Y161.57, while the dollar added 0.2 per cent to Y118.72 and the pound gained 0.3 per cent to Y237.87.

The New Zealand dollar, which was among the biggest fallers against the Japanese currency on Thursday, rallied 0.1 per cent to Y88.23, while the Australian dollar, also a big faller in the previous session, added 0.2 per cent to Y99.02.