The euro rose for a fourth day against the dollar and the yen on bets on a deal to rescue the Irish banks to prevent contagion in bond markets in the region.
The single currency hit a one-week high against the dollar after the finance ministers of the EU said the deal will create a capital fund lenders in Ireland. New Zealand dollar fell after Standard & Poor's revised its outlook on the nation's credit rating to negative. The U.S. dollar fell before the Federal Reserve released minutes of the meeting this month, when politicians decided to buy $ 600 billion in Treasuries.
Ireland try to "remove some of the uncertainty, and we're seeing a bit of a relief rally in the euro," said Henrik Gullberg, currency strategist at Deutsche Bank AG in London. "If this will continue or not, I'm not so sure. Attention will shift to the other, presumably weaker peripheral states such as Portugal."
The euro advanced 0.5 percent to $ 1.3743 at 10:46 am in London from $ 1.3673 in New York on November 19 and touched $ 1.3786, the highest since Nov. 11. The currency gained 0.4 percent to 114.71 yen. The dollar fell to 83.46 yen from 83.55 yen. New Zealand currency fell 0.5 percent to 77.52 U.S. cents.
Ireland's request for a bailout makes it the second member of the euro to find the rescue of the EU and the International Monetary Fund. The European Central Bank said in a statement that is "safe", the program will help ensure the stability of the nation's banking system.
The MSCI World Index advanced actions fourth straight day, gaining 0.4 percent.
'Next week'
The Irish Prime Minister Brian Cowen said yesterday he hoped that talks on the package to be completed in the coming weeks. "Said Finance Minister Brian Lenihan the loan will be less than 100 million euros (137 billion), but declined to give further details in a press conference in Dublin the night.
"A sovereign small as Ireland, facing a huge problem we have in our banking sector can not in its own address all the problems," said Lenihan. Ireland can not draw down the entire loan, he said.
The dollar fell against 15 of its 16 most-traded counterparts before the Fed released minutes of the meeting this month's Federal Open Market Committee's.
Fed chairman, Ben S. Bernanke said Nov. 19 that the use of purchases of monetary policy affects asset prices "very significant."
Disinflation concerns
U.S. inflation has slowed since the most recent recession began in 2007, and "deflation could hinder recovery," Bernanke said. "Policies are not enough support in advanced economies could undermine the recovery not only in those economies, but for the world as a whole."
Bernanke "strong language" will be launching a fall in the dollar as the pressure of unemployment and deflation of the Federal Reserve will continue to provide a mandate for the measures in force, Todd Elmer, currency strategist in Singapore-based Citigroup Inc .
"There are plenty of breathing room for the Fed to maintain its very accommodative stance," said Elmer.
The housing industry triggered the worst recession in seven decades, is still struggling to recover.
The median forecast of 57 economists expected a report from the National Association of Realtors on Nov. 23 will show the purchase of homes already sold fell 1.1 percent to an annual pace of 4.48 million last month.
The slowdown in Europe
The euro's gains were limited amid concerns of other countries such as Portugal, are still vulnerable and fiscal austerity measures slow growth in the region.
The strength of the euro against the dollar should be seen as "short-term corrective" and the single currency may weaken to a low of $ 1.3365, Karen Jones, head of fixed income, commodities and technical analysis in currency Commerzbank AG in London, wrote in an e-mail the report today.
A composite index based on a survey of purchasing managers in the euro area, both in industries probably fell to 53.6 this month from 53.8 in October, according to the median forecast of economists polled ahead of tomorrow's report London-based Markit Economics. A reading above 50 indicates expansion.
"It will take many years, many of the fiscal problems of some eurozone countries to solve," said Gareth Berry, currency strategist at UBS AG in Singapore. "We are very bearish for the euro, as these problems will not disappear overnight."
Kiwi gives
UBS recommends investors sell the currency, pointing to a fall of 1.25 dollars in late January, said Berry. The median forecast of economists surveyed by our News of the euro to trade at $ 1.37 in the first quarter of 2011.
Called kiwi dollar slipped against all its major counterparts after S & P rating of New Zealand's credit was at risk of weakening the nation's banks. long-term 'AA' from 'A-1' sovereign credit ratings in the short term were affirmed. New Zealand is in danger of a "prolonged" struggle to recover from the global recession given the decreased demand for their products in the U.S., UK and Japan, central bank governor, Alan Bollard said last week.
Asian currencies rose as Ireland's decision to seek help calmed investor concerns that the debt crisis from spreading. The rescue package helped to counter speculation that China will increase in the amount of cash banks must set aside reserves to slow economic growth in the market in the region of greatest export.
Thailand reported today that its economy expanded by 6.7 percent last quarter last year, cooling from a rate of 9.2 percent in the last three months.
South Korean won appreciated 0.7 percent to 1,125.85 per dollar. Malaysia's ringgit rose 0.5 percent to 3.1033. Thailand's baht rose 0.1 percent, to 29.93.
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