Jean-Claude Trichet, European Central Bank President, eased investors worries about European bank stress tests and the central bank’s liquidity programs. This however, resulted in Dollar falling against the Euro.
Positive employment data in Australia and America persuaded investors to move into equities rather than dollar, Japanese yen and gold.
The value of the Euro has increased to $1.2676 from $1.2641 in late New York trading on Wednesday. It was at an all time high in the last two months.
The stress test, which the European bank is undergoing, is the topic of most interest and the financial experts feels the same. At Trichet’s monthly news conference analysts opined the same thing.
Jean Trichet said that necessary action must be taken after the publication of stress tests. He said investors must wait until the July 23, which is the release date of the stress test results. The stress test result will help to judge ECB for it is still providing unlimited liquidity to the financial system.
Around 91 European banks are about to under go the stress tests.
Kathy Lien, director of currency research at GFT, said â€œ”A move to $1.30 in the euro may hinge upon the results of the stress tests, but Trichet’s encouraging words should provide support for the currency.”