Euro tops $1.30 level for first time since April 2005 Posts & ArticlesBy Steve Goldstein, MarketWatch Last Update: 6:14 AM ET Nov 24, 2006
LONDON (MarketWatch) -- The euro on Friday broke through the $1.30 level for the first time since April 2005, and kept moving well above that barrier, as the greenback's rout continued amid concerns over flagging economic growth in the U.S.
The euro rose to as high as $1.3085 in a matter of minutes after it captured the $1.30 mark. After some brief dollar buying, the euro then rose to as high as $1.3108.
That's up from $1.2948 late Thursday, and lows of $1.2838 on Wednesday. See live currency prices.
On Wednesday, data showed showing waning U.S. consumer confidence and growing jobless claims, prompting a big dollar sell-off.
The British pound jumped as high as $1.9351, up from $1.9156 late Thursday and its best level since December 2004.
The dollar fell to as low as 115.61 yen from 116.27 yen.
There wasn't any obvious fundamental trigger for Friday's move higher. French business confidence as expected held near five-year highs in November, though the euro's sharp appreciation came about 45 minutes after that data release.
It also comes after unexpected strength in German business confidence, in a poll released on Thanksgiving.
There's also been a number of reports over the last week that carry trades in which traders borrow yen to invest elsewhere are being closed out, though it was the euro and the British pound that rose the most against the dollar on Friday.
Peter Stoneham, managing analyst at Thomson Forex Watch, said a combination of factors are behind the dollar's drop, and noted the dollar's descent came amid light volumes.
"It's an incredibly thin market. The dollar move has been like a hot knife through butter, there's absolutely no resistance," he said.
The dollar index falling through a key support level and speculation that hedge funds are closing positions held in early November also has contributed to the gains for European currencies, he said.
The dollar's decline hit export stocks in Europe and Asia
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