Euro firms on China scholar's investment comment
Updated at: 0849 PST, Thursday, May 26, 2011
TOKYO: The euro firmed during Asian trade Thursday after a Chinese scholar published a media commentary arguing that Beijing should expand purchases of euro-zone sovereign debt.Investors flocked to the single currency after Wang Yong, a professor at the People's Bank of China's training institute, wrote in his piece that China should also increase direct investment into Europe.
For China, such moves should both help alleviate the global crisis and contributes to "counter-protectionism strategy," giving Beijing more leverage to negotiate for concessions in trade talks, Wang wrote.
The piece triggered buying of the euro, which jumped to $1.4136 and 115.86 yen from $1.4083 and 115.40 yen in New York Wednesday.
Still, traders said the Greek debt concerns should limit the euro's gains as investors remained cautious amid uncertainty about how the fiscally-strapped nation's problems could be resolved.
"While we continue to see a market- and euro-friendly outcome (on Greece) as the most likely on a multi-week view, political risks make a further euro/dollar breakdown very real," BNP Paribas analysts said in a note to clients.
The euro's gain was also magnified in part due to thin trading in Asia, traders said.
The dollar was at 81.96 yen, nearly flat from 81.89 yen in New York. (AFP)
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