Tuesday, 31 July 2012 16:25
LONDON: The euro rose against the dollar on Tuesday on month-end demand, but stayed below three-week highs on doubts the European Central Bank can meet market expectations of bold steps to combat the debt crisis.
Expectations that the ECB may lower interest rates in coming months saw the euro hit a record low against the higher-yielding Australian dollar. The Aussie was also buoyed by comments from Chinese premier Wen Jiabao that China would fine-tune policy to support economic growth.
The single currency rose 0.25 percent against the dollar to $1.2285, well below the high of $1.2390 hit last Friday. Traders said the euro moved higher due to buying by a sovereign investor in the euro/sterling currency pair, probably to meet month-end requirements.
That led to some to pare bets on euro weakness. Traders cited strong offers to sell the currency above $1.2300 while bids were layered below $1.2250 and stop losses at $1.2220.