Previous session overview

The euro eked out slight gains against its major rivals Friday, taking advantage of improved investor sentiment that bolstered global stock markets.

In a sign concerns over the euro-zone sovereign debt crisis have eased somewhat, the interest rate banks charge each other for dollar-denominated lending fell for the first time in three weeks, helping to allay fears that a strain in funding conditions will put the global economic recovery in jeopardy.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 86.275 from 86.296.

U.S. consumer spending and personal income data released Friday had little immediate impact on major currency pairs.

EURUSD took advantage for a second day of improved investor sentiment, extending its gains past the USD1.24 level to USD1.2414 from USD1.2356 late Thu, as global stock markets advance. USDJPY at JPY91.26 from JPY90.90 after Japan reports its economy still stuck in deflation. GBPUSD traded at USD1.4593 from USD1.4570.

Market expectation

The euro is not out of the woods, analysts said, as the entrenching recovery in the U.S. and parts of Asia will continue to outstrip the slow-growth euro zone, putting further pressure on a currency that already grapples with countries weighed down by stressed sovereign debt.

In the near term, investors could use the euro's bounce as an opportunity to place new bets against the common currency, said some analysts.

Friday markets were expected to be relatively thin, with traders in the U.S. and U.K. preparing for a three-day weekend. In thin markets, small trades can sometimes have outsize influence.

Disclaimer: the data made available by Dukascopy (Suisse) SAis for informational purposes only. Publication of this data by Dukascopy (Suisse) SA does not constitute provision of investment advice and Dukascopy (Suisse) SA assumes no responsibility with regard toany information, forecast or recommendation herein contained and assumes no responsibility with regard toany losses resulting from any activities conducted the basis of this data, including any investment decisions.

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