In Asian trading today, the single currency Euro surged 1% higher against the U.S. Dollar as well as other major currencies, as automatic buy orders tripped following the release of encouraging economic data from China, among other things.|
As reported at 2:58 p.m. (JST) in Tokyo, the Euro was trading against the U.S. Dollar at a peak of $1.2809, before slipping back to $1.2800. The Euro also rose higher against the Japanese Yen, trading at 107.60 Yen, a gain of .8%.
Among the other positive news for the Euro was the market’s acceptance of the newly agreed to Basel rules, which will mandate that European banks retain highest quality capital totaling 7% of riskier assets, a requirement that is 5% higher than current rules; markets were encouraged that the regulation allows banks sufficient time – in some cases nearly eight full years – to get into compliance with the new rule.
According to the president of the European Central Bank, Jean-Claude Trichet, the Basel agreement will fundamentally and substantially contribute to the Eurozone’s financial stability and economic growth over the long term.
In China, data was released over the weekend that showed that money growth beat analyst predictions, while factory production rose in August; both factors are an indication that the Chinese economy remained upbeat in spite of efforts by the Chinese central bank to slow down bank lending.