Euro Continues To Climb On Risk Appeal

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The euro remained strong versus other major currencies on Thursday in New York as rising global stocks fueled risk appeal. The European currency extended multi-month highs against both the dollar and sterling.

In economic news, Eurostat estimates revealed that the euro area's trade balance showed a surplus of 12.6 billion euros on a seasonally adjusted basis in July compared to a deficit of 3.5 billion euros in the year-ago period. Economists had expected the surplus to come in at a much more modest 1.1 billion euros.

Meanwhile, the European Union leaders are set to meet in Brussels to prepare a strategy and to call for a united EU position for the G20 summit in Pittsburgh.

Curbing executive pay is going to be one of the main topic for discussion, reports said citing a draft statement. EU leaders will also support the sustenance of various stimulus measures at the G20 summit on September 24-25.

The euro was little-changed against the dollar after again extending its best level in almost a year. The 16-member currency reached as high as 1.4766, its highest mark since September 21, 2008.

This morning, the U.S. Labor Department also revealed that the number of people filing first-time unemployment claims slipped again last week, indicating that layoffs are continuing to ease. Nonetheless, the data continued to indicate that hiring remains sluggish.

The European currency extended a four-month high against the sterling to 0.8939 with a mid-day surge in New York. The rise took the euro above a near-term range.

In the UK, retail sales remained flat in August, following a revised 0.2% growth registered in July, a report from the Office for National Statistics revealed Thursday. The agency revised the monthly growth for July from the initially reported 0.4%. August's flat reading was in contrast to economists' expectations for a 0.1% increase.

The euro reached its best level in nearly three weeks against the Japanese yen. The common currency reached as high as 134.79, continuing an upward trend that has spanned a week.

In its Monetary Policy Meeting, the Bank of Japan decided by a unanimous vote to maintain the uncollateralized overnight call rate at 0.1%. The last change in the rate was a 0.1% cut in interest rates at the December 2008 meeting.

(Market News Provided by RTTNews)