NEW YORK (Dow Jones)--The euro experienced a bump up on a report Monday of an expansion of the European Financial Stability Facility, or EFSF, a fresh sign of support for the under-pressure currency.
Jean-Claude Juncker, head of the Eurogroup of finance ministers, said euro-zone officials will increase EFSF effective lending capacity to EUR440B.
"An increase in size really hints that the stability mechanism will be around for a very long time," said Guy LeBas, chief fixed income strategist with Janney Montgomery Scott in Philadelphia. "The exact euro amount is not all that significant, but the fact that it's growing is. The EFSF is essentially designed as a bailout fund."
Broadly however, the euro remains under pressure to start a new week as the impasse over the Greek debt crisis continues, putting even greater importance on key decisions within and outside the country for the path of the single currency.
The euro, though, had pared most of its earlier losses on the session on the EFSF news and traded back to almost even against the dollar; it reversed direction against the yen and made modest gains against the Japanese currency.
"Any positive impact on the euro is likely to prove short-lived," said Omer Esiner, chief market analyst with Commonwealth Foreign Exchange in Washington.
The euro was recently quoted at $1.4294 from $1.4309 in late trade Friday in New York, according to EBS via CQG. The dollar was at Y80.22 from Y80.04.
By Andrew J. Johnson
Source: http://online.wsj.com
Jean-Claude Juncker, head of the Eurogroup of finance ministers, said euro-zone officials will increase EFSF effective lending capacity to EUR440B.
"An increase in size really hints that the stability mechanism will be around for a very long time," said Guy LeBas, chief fixed income strategist with Janney Montgomery Scott in Philadelphia. "The exact euro amount is not all that significant, but the fact that it's growing is. The EFSF is essentially designed as a bailout fund."
Broadly however, the euro remains under pressure to start a new week as the impasse over the Greek debt crisis continues, putting even greater importance on key decisions within and outside the country for the path of the single currency.
The euro, though, had pared most of its earlier losses on the session on the EFSF news and traded back to almost even against the dollar; it reversed direction against the yen and made modest gains against the Japanese currency.
"Any positive impact on the euro is likely to prove short-lived," said Omer Esiner, chief market analyst with Commonwealth Foreign Exchange in Washington.
The euro was recently quoted at $1.4294 from $1.4309 in late trade Friday in New York, according to EBS via CQG. The dollar was at Y80.22 from Y80.04.
By Andrew J. Johnson
Source: http://online.wsj.com
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