US dollar gains on euro

The US dollar was a bit stronger on Wednesday after France’s Finance Minister made comments indicating that he did not think it wise for the euro to strengthen any further than it already has. Analysts were of the opinion that the remarks might be the opening salvo in an attempt to reduce the strength of the single currency, especially in light of comments from an official of the European Central Bank that there is no real reason for the euro to be strengthening. However, most analysts believe that the dollar will remain in a general trend of weakening despite the day’s gains.

The dollar was 0.6 percent higher versus the euro at mid-session in New York, at $1.2784. The greenback remained unchanged, however, in relation to the Japanese yen, standing at ¥109.70, lending credence to the theory that the dollar is not ready to start strengthening significantly at the present time. The South Korean won strengthened by 0.9 percent to Won 936.80 versus the US dollar, while the Taiwanese dollar added 0.1 percent to T$31.56 against the greenback.

Meanwhile, sterling strengthened in relation to the euro, gaining 0.4 percent to £0.6780, while it lost 0.1 percent to the US dollar late in the day to $1.8880. Earlier in the day, sterling hit a one-year high of $1.9025 versus the greenback when the minutes from May’s Monetary Policy Committee meeting were released, revealing that one member of the committee had voted to raise interest rates in the UK. In addition, one member voted to cut the rate and the remaining six members voted to keep rates at the current rate.