The single currency recovered on Tuesday as the IMF stepped in and disclosed more tools which could help in improving liquidity and financing needs of its European member countries. The International Monetary Fund pointed out, that new tools will help in meeting the diverse liquidity needs of its member countries. The IMF said, “The new tools will enable the fund to respond better to the diverse liquidity needs of members with sound policies and fundamentals, including those affected during periods of heightened economic or market stress—the crisis-bystanders—and to address urgent financing needs arising in a broader range of circumstances than natural disasters and post-conflict situations previously covered.”
The single currency gained to 1.3513 on Tuesday as compared to 1.35 on Monday’s North American trading session.
The dollar index DXY which measures the US dollar’s performance against its six major counterpart currencies fell to 78.252 on Tuesday as compared to 78.252 on Monday’s late trading hours.
Against the Japanese Yen the US dollar slightly gained to 77 on Tuesday as compared to 76.79 on late Monday. The British Pound gained to 1.5637 versus the greenback as compared to 1.5630 on Monday.
Many analysts were also of the opinion that Thanksgiving holiday of Thursday in United States also played a major role in recovery of the single currency and the euro gained for only short term. Currency Strategist Kathy Lien commented, “The resilience of the euro probably has more to do with short covering and position squaring ahead of an important holiday in the U.S.”
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