Euro Rises as IMF Proposes $500 Billion Boost in Capacity; Dollar Weakens
Jan. 18, 2012, 5:38 p.m. GMT
[BLOOMBERG, by Catarina Saraiva and Emma Charlton]'The euro strengthened for a second day against the dollar and yen as the International Monetary Fund proposed boosting its lending capacity by as much as $500 billion to safeguard the global economy.
The 17-nation currency rallied against most of its major peers as Greek officials resumed negotiations with bondholders. The dollar fell against the euro on reduced demand for a refuge as U.S. data showed a rebound in industrial production. Brazil’s real climbed as risk appetite improved, while the pound weakened against the euro as Britain’s unemployment rose.
“The rally in the euro seems like it’s continuing,” said Kathy Lien, director of currency research with online trading firm GFT Forex in New York. “People realize that policy makers have no choice but to come up with additional rescue plans for these countries and to actually commit additional funds to provide a safety net for these countries.”
The euro appreciated 0.6 percent to $1.2818 at 11:55 a.m. New York time, after rising 0.5 percent yesterday. Europe’s shared currency climbed 0.6 percent to 98.47 yen. It fell on Jan. 16 to 97.04 yen, the weakest level since December 2000. The dollar was little changed today at 76.82 yen.
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