Euro rises on bets for ECB tightening
PARIS – Agence France-Presse
![Euro rises on bets for ECB tightening](http://image.hurimg.com/i/hurriyet/75/0x0/59cb30f845d2a0568ce212f0.jpg)
While ECB boss Mario Draghi made no mention of the bank’s plans for its bond-buying scheme in a much-anticipated speech on Sept. 1, analysts said his optimism about the eurozone economy was enough to fuel euro buying.
“Mr. Draghi provided investors an opportunity to keep adding to long positions,” said market strategist Hussein Sayed FXTM online foreign exchange brokerage.
Janet Yellen’s decision not to discuss the Federal Reserve’s plans for future interest rate rises was also seen as an indication of the U.S. central bank’s reticence to announce any more increases.
The single currency rose as high as $1.1965, around its highest since January 2015, while it was also around eight-year highs against the pound. The dollar continued to struggle against the yen.
While the ECB is widely expected soon to begin tapering its stimulus, its policymakers are concerned about the impact of a strong currency on the bloc’s exports.
“Mario Draghi will be tearing his hair out,” said Greg McKenna, chief market strategist at AxiTrader.
“If saying nothing can drive the euro to its highest level since January 2015 then the ECB president and his colleagues will be genuinely worried about the impact an announcement to further reduce its QE program could have on the single currency.”
On equity markets Hong Kong extended its winning run into a fifth straight day, although early gains were pared on profit-taking.
But Hong Kong-listed shares in Wanda Hotel Development Co plunged almost 10 percent at one point even though the firm denied reports that chairman Wang Jianlin had been barred from leaving China and detained for hours. It trimmed some of the losses but still ended down more than eight percent.
Shanghai added 0.9 percent but Tokyo ended flat, Sydney shed 0.6 percent and Seoul was off 0.4 percent.
Tech giant Samsung sank almost two percent in Seoul, extending Aug. 25’s losses after Lee Jae-Yong, de facto head of the world’s biggest smartphone maker, was jailed for five years for bribing South Korea’s ousted president and other offences.
In European trade, Paris slid 0.4 and Frankfurt shed 0.6 percent in midday trading. London was closed for a holiday.
The main U.S. oil contract West Texas Intermediate edged down after surging at the end of last week, as energy companies were forced to shut down some of their operations because of deadly Hurricane Harvey.
“Oil prices are reacting differently to the considerable disruptions to US oil production and crude oil processing caused by Hurricane Harvey,” said analysts at Commerzbank.
While U.S. petrol prices hit a two year high, crude prices have begun sliding again.
Commerzbank analysts said that while oil production in the region has been shut down, demand for crude has also been lowered as the refineries have been closed and shipping has also been disrupted.