Market info

Dollar falls against euro

14 Jun  - Fundamental 

The dollar turned lower against European currencies Monday after a report showed the euro zone's economy is still growing and increased investors' appetite for riskier assets.

What prices are doing: The greenback fell 1% against the euro to $1.2239 and fell 1.3% against the British pound to $1.4736 Monday.

The euro has rebounded 5.4% since it fell to $1.1892, a four year low against the dollar early last week.

Meanwhile, the dollar rose 0.3% against the Japanese yen to ¥91.853 Monday.

What's moving the market: Investors welcomed news that industrial production in the euro zone increased more than expected in April. The region's output rose 0.8% over March, better than the 0.5% economists had forecast, the European Union's statistics office reported Monday.

The report calmed fears about Europe's debt crisis offsetting a global economic recovery, and drove investors away from the safe-haven dollar to the euro and pound, which are considered riskier assets.

What analysts are saying: «We're in a period of recovery in terms of risk appetite,» said Neil Mellor, a currency strategist with Bank of New York Mellon's London office.

Negative sentiment about the the euro zone's debt crisis has put major pressure on the region's shared currency lately, and an absence of bad news has helped the euro rebound over last week's lows, Mellor said.

Looking ahead: Currency traders will be watching for several key economic reports out of the euro zone later this week. Tuesday is the first-quarter employment report, Wednesday marks the release of first-quarter labor costs data, and on Thursday the European Central Bank will publish its monthly report.

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