Euro rallies as yen battered by weak data (Reuters)
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The euro posted five month peaks against the dollar in thin holiday trading on Tuesday, and charged up to 10-month peaks against the yen after the latest installment of dismal Japanese economic data. The dollar also took advantage of the bad news from Japan, charging up to fresh 16-month peaks against the yen. But the greenback kept a softer tone against other currencies, weighed by lingering concern about economic slowdown in the United States.
The euro has strengthened steadily over the past couple of weeks, bolstered by sentiment that the European region is the best placed to withstand a global economic slowdown. That bullishness remained in evidence on Tuesday, although activity was light, with major European markets still closed after Monday"s Christmas Day holiday, no U.S. economic data expected on Tuesday and trading desks thinly staffed in the U.S.
"(There"s) a little bit of a rally in the euro, whether or not there is any follow-through, I don"t know," said John Hazelton, trader at PNC Bank in Pittsburgh. "Eventually there will be, but it"s an awfully thin market." Overnight, the euro (EUR-) punched through the 93 cent level for the first time since late July, but pared its gains to trade around 92.80 cents in early New York.
The dollar also tumbled to 5-1/2 month lows below 1.6350 francs overnight, before recovering around 1.6360 francs...
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