NEW YORK: The euro surged for a second day Friday, adding 0.7 US cents to Thursday's two cent gain, pushed by what one analyst said was short covering and sustained by poor US trade data.
The European currency traded roughly around the break-even line of $1.3261 but then took a leap to the $1.3350 levels the morning opening -- just 15 minutes before US trade data for November showed a wider-than-expected deficit that implied slower growth.
"While a rise in the euro isn't out of the ordinary lately, particularly after yesterday's European Central Bank monetary policy decision and press conference, many euro crosses had settled in to a range in the 18 hours before the spike occurred," said Neal Gilbert of GFT.
He said a Goldman Sachs recommendation with a target for $1.37 could have been the force, but also a squeeze on short sellers.
"Since the market had turned sideways in the Asian and European sessions, many investors were likely assuming a profit taking drop was about to take place."
Now that trade has been flushed out, he added, "the profit taking is more likely to take place."
At 2200 GMT, the euro was at $1.3341, off the day's high of $1.3366.
The yen sagged to its lowest level in more than 30 months, hitting 89.18 yen to the dollar from 88.64 late Thursday.
Against the euro, it hit 119.00 yen, compared to 117.53 Thursday; it was the yens lowest level in 20 months against the euro.
The pound slipped to $1.6129 from $1.6158, and the dollar moved to 0.9135 Swiss francs from 0.9145 francs.
The Chinese currency continued its push higher, to 6.2180 yuan per dollar from 6.2256 a day earlier and 6.2316 a week ago.
-AFP/ac
Euro adds more gains on dollar
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Euro adds more gains on dollar
