The European Single Currency, Euro, on Friday,December 1, soared higher for a third consecutive day, as investment flows propped up the single currency, although some weakness in stock markets prompted investors to take profits at higher levels.
“The weakness in equities is causing a mild risk-off sentiment, though the overall mood seems to be quite constructive towards the euro,” said Manuel Oliveri, an FX strategist at Credit Agricole in London.
Global manufacturing expanded at the fastest pace for years last month and the second fastest for two decades in the euro zone, driven by robust demand. This has bolstered the case for central banks to shift to tighter monetary policy.
The single currency EUR=EBS climbed as much as 0.3 percent earlier in the session to hit $1.1940 but it gave up most of its gains to trade nearly flat on the day at $1.1902 on Friday.
Morgan Stanley strategists said unhedged currency inflows into European stocks have picked up noticeably in recent weeks, pushing up the single currency despite shrinking interest rate differentials.
Investment flows into European assets have picked up at a time when growth prospects have brightened considerably. Business growth is roaring in the final weeks of the year, surveys showed last w1eek.
Elsewhere, the dollar steadied against the Japanese yen on Friday, losing steam after rising to a 10-day high, as the market endured the wait for a vote on a U.S. tax reform bill.
The dollar was last at 112.550 yen JPY=EBS, broadly unchanged on the day, after it was decided that the U.S. Senate would not vote on the tax bill late on Thursday night U.S. time and instead continue a debate on Friday.
The dollar index against a basket of six major currencies was flat at 93.01 .DXY but poised to eke out some tiny gains for the week, during which it managed to pull away from a two-month low of 92.496.
The pound GBP=D3 gave up most of its gains after getting a temporary boost from better-than-expected UK manufacturing data, Reuters reports.
