LONDON, 17 August 2006 — The European single currency soared above 1.28 dollars yesterday after news of benign inflationary pressures in the United States further lessened the chances of a US rate hike in the coming months. The euro climbed to 1.2861 dollars in late European trading, compared with 1.2785 dollars late on Tuesday in New York. The dollar stood at 115.74 yen, from 116.11.
The euro was changing hands at 1.2861 dollars against 1.2785 late on Tuesday, 148.85 yen (148.48), 0.6770 pounds (0.6750) and 1.5788 Swiss francs (1.5817). The dollar stood at 115.74 yen (116.11) and 1.2274 Swiss francs (1.2368). The pound was being traded at 1.9002 dollars (1.8935). On the London Bullion Market, the price of gold rose to 629.75 dollars per ounce, from 625.50 dollars on Tuesday.
Asian stocks rallied sharply higher yesterday over US economic data. The US Labor Department overnight announced the headline producer price index rose by just 0.1 percent in July from June. But the core rate, excluding food and energy, fell surprisingly by 0.3 percent.
Wall Street soared in response and markets in the Asia Pacific followed suit however caution before the release of the US Consumer Price Index later in the day capped some of the main indices. Tokyo led the surge with a 1.61 percent gain, Seoul rose by 1.58 percent, Shanghai by 1.31 percent, Taipei was up 1.23 percent, Bombay rose 1.20 percent and Hong Kong by 1.02 percent.
