Euro modest gains Friday, as the majority of European banks by the regulatory authorities of the stress test; as investors learned the details of stress testing, the original market for the test has also been strictly reduce the level of suspicion, and this has boosted the euro .
Factors that boost the euro also has a better than expected data and the market outlook, the U.S. stock market rally. Data, Ifo7 month business climate index rose more than expected.
BNP Paribas currency strategist in New York, said Sebastien Galy, stirred up the U.S. stock market rebound of the euro; Dow Jones industrial average rose about 100 points. The reason why the euro was also higher as investors began to digest the results of stress testing, stress testing is very specific in detail, to a certain extent, ease the rigor of the test market for the lingering concerns.
Late Friday, the euro was 1.2918 U.S. dollars, against 1.2892 U.S. dollars late Thursday. Dollar 87.45 yen, versus 86.93 yen late Thursday. The euro was 112.98 yen, against 112.05 yen late Thursday. 1.5432 U.S. dollars against sterling, against 1.5265 U.S. dollars late Thursday. Dollar 1.0527 Swiss francs against 1.0428 Swiss francs late Thursday.
The dollar index fell to 82.475 from 82.611.
European Union was expected by the Committee of European Banking Supervisors to carry out the banking sector stress testing will restore trust in the European banking system.
Test results show that there are seven banks need to raise new capital to strengthen the financial strength and potential to resist another round of economic downturn or the impact of the debt crisis in Europe.
Failed the stress test were five banks in the Bank of Spain, a German bank and a Bank of Greece. The total funding gap of about 35 billion euros.
In the stress test results before the market volatility, the euro hit an intraday low of 1.2794 U.S. dollars, because the stress test is clearly not the case of default on sovereign debt into the scope of the study.
Scotia Capital in Toronto, Sacha Tihanyi, currency strategist, said, Commodity Futures Trading Commission’s data indicates, in the stress test results, investors are very hesitant to overweight positions.
Tihanyi said the data covering the week ended Tuesday. Investors for the third consecutive week of underweight positions against the euro, but this change is very modest.
Pound against the dollar sharply higher, up more than 1% of the pre-announced second-quarter UK GDP data than expected. Data showed Britain’s second-quarter GDP grew by 1.1%, marking the fastest increase in more than four years, but also far higher than the 0.6% economists had expected.