Encouraging data from the European bank stress tests, and a growing demand for euros from Asian central banks, has helped push the euro to an eleven-week high against the dollar. This, combined with mounting evidence that the US economy is slowing, has investors turning to the European currency, and by 7:30 am EDT, the euro was up 0.6 percent to $1.3075, just shy of a high of $1.3091, its strongest since May 10. Traders said stop-loss orders were triggered above $1.3050, accelerating the currency’s gains, with options barriers seen at $1.3100.
“Data in the euro zone for now is pretty resilient and at the margins that argues for euro/dollar to edge higher, though people are pretty cautious at these levels,” said Tom Levinson, currency strategist at ING.
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