Celebrating 25 Years of Scoop
Special: Up To 25% Off Scoop Pro Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

While you were sleeping: EU defends its currency

While you were sleeping: EU defends its currency

November 26 (BusinessDesk) - Equities in Europe advanced as central bankers there came out in force to reassure investors that the single currency zone wasn’t going to fail.

As Ireland was in talks to finalise a financial bailout that might total about 85 billion euros, investors remained concerned about other indebted EU members such as Portugal and Spain.

Deutsche Bundesbank President Axel Weber, who is also a European Central Bank Governing Council member, said that the euro zone bailout fund has enough money to calm markets.

“I think we can rule out” the pessimistic scenario that the fund could be exhausted, Weber said in a panel discussion in Berlin today. “We’ll do everything to safeguard the existence of the euro,” he added.

Financial markets in the U.S. were closed for the Thanksgiving holiday.

In Europe, the Stoxx 600 rose 0.5% to 267.72 at the 4.30pm close in London. National benchmark indexes rose in 13 of the 18 western European markets. Trading was lighter than usual because of the U.S. holiday.

The U.K.’s FTSE 100 Index rose 0.7%, Germany’s DAX Index gained 0.8%, while France’s CAC 40 Index advanced 0.3%.

"The most important thing for the equity market is the ability to believe that the economic cycle is staying intact," Philip Isherwood, European equities strategist at Evolution Securities, told Reuters. "That means not just U.S. data reassuring, but also European."

The difference between the yields on Spanish and Portuguese bonds widened by 10 basis points over German Bunds, as investors demanded a higher premium to hold on to the sovereign debt of the nations considered most at risk.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

Speaking in Bratislava, Slovakia's ECB Governing Council member, Klaus Makuch, played down the troubles in Ireland and the recent slump in the euro.

"The Irish issue is not pleasant, but it can be solved," Makuch told a business conference. "The euro is slightly overvalued, no drama, it hit a two-month low," he added.

The euro fell as low as US$1.3287, close to a two-month low of US$1.3284 reached on Wednesday.

By 1443 GMT, the euro edged higher to US$1.3340. Traders said option expiries at US$1.3350 could check further gains.

Oil’s gains today were modest compared with yesterday’s 3.2% climb. Analysts expected prices to remain range-bound in thin volume because of Thursday's Thanksgiving holiday.

U.S. crude for January gained 46 cents at US$84.32 a barrel by 1132 GMT.

ICE Brent rose 41 cents to US$86.25.

Spot gold edged lower, declining US$1 to US$1,372.70 an ounce in London by 1512 GMT.

U.S. gold futures held steady around US$1,373.5 an ounce.

(BusinessDesk)

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.