Reply #4: Euro Rises as German Lawmakers Vote to Approve Expansion of Bailout Fund [View All]

[Pale Blue Dot]

The euro rose toward a one-week high versus the dollar as Germany’s lower house of parliament approved the expansion of a bailout fund for debt-stricken euro- area nations to help contain the sovereign-debt crisis.

The 17-nation currency strengthened against 13 of 16 major counterparts as German Chancellor Angela Merkel won the backing of her coalition to expand the powers of the European Financial Stability Facility. The yen weakened as Asian and European stocks reversed losses, spurring demand for higher-yielding assets. South Korea’s won declined after the nation’s current- account surplus shrank.

“The German talk about the euro zone is becoming a bit more positive, which reduces the risk of a disorderly breakup,” said Adrian Schmidt, a currency strategist at Lloyds Bank Corporate Markets in London.

The euro gained 0.7 percent to $1.3642 at 11:26 a.m. in London after rising to $1.3690 yesterday, the strongest since Sept. 21. The currency appreciated 0.8 percent to 104.59 yen. The yen was little changed at 76.69 per dollar.

http://www.bloomberg.com/news/2011-09-28/yen-dollar-rise-as-europe-debt-concern-boosts-safety-demand-aussie-falls.html