Investors pared predictions for a collapse of the 17-nation currency as E.U. leaders intensified their efforts to solve the sovereign debt crisis. Some analysts have stopped forecasting that the currency may drop below $1.3400. The Euro strengthened versus the greenback following reports that the Euro-region’s leaders were working hard at coming up with a solution to the sovereign debt crisis.
Meanwhile, the U.S. Dollar weakened against most of its world currency peers as commodities advanced and equities climbed, thereby diminishing demand for safe havens. The Dollar traded lower than the Yen as Japan released data revealing that exports increased 2.4 percent in the month of September. Metrics showed that demand for automobiles and auto parts rose. Furthermore, Japan’s Finance Minister, Jun Azumi, indicated that Japan is getting ready to intervene in the foreign currency exchange to cap the Yen’s appreciation –a factor that may hurt exports. According to analysts, the Yen is trading close to dangerous levels and this may pose a serious problem for carmakers and other manufacturers.
Other news showed that the Canadian Dollar traded close to its highest price this month. This took place as China issued Manufacturing data reflecting growth for the first time in four months. The Canadian Dollar rallied further against its U.S. counterpart as European leaders outlined a plan to help regional banks.
Lastly, the Pound Sterling weakened against most of its Forex exchange peers on concerns that economic growth is slowing down in the U.K.