Ifo business survey, Trichet comments boost euro

Story link: Ifo business survey, Trichet comments boost euro

The euro was higher versus the US dollar on Wednesday on gains in business confidence in Germany in March.

The Ifo business climate index was up to 104.8 from 104.1 in February against an expected decline.

Also helping the euro were comments from European Central Bank president Jean-Claude Trichet, who said that interest rates should hold Eurozone inflation down.

Meanwhile, the greenback was hurt by reports from the Commerce Department which showed a 1.7 percent decline in durable goods sales in February and a 1.8 percent drop in new home sales in the US.

At just before 11 a.m. in New York, the dollar was at $1.5737 in relation to the euro.

The pound also declined against the euro after comments from Bank of England governor Mervyn King predicting that the UK currency will decline as a result of slowing economic growth.

The pound was also hurt by dropping equities markets.

In late morning trade in New York the pound traded at 78.73 to the euro after going as low as 78.86 to the shared currency earlier, while it traded at $1.9988 to the greenback and to ¥198.2111.

The euro and the US dollar were also lower versus the yen which, along with the Swiss franc, saw gains as investors exited risky carry trades in which they sell low yielding currencies to purchase higher-yielding currencies.

At late morning in New York, the Euro traded at ¥156.0609 while the dollar was at ¥99.1650.

The yen and the Swiss franc both saw gains versus the Australian and New Zealand dollars, with the yen trading at ¥91.2814 to the aussie and at ¥79.825 to the kiwi.

The Swiss franc was at SFr0.9183 to the Australian currency and at SFr0.8026 to the New Zealand dollar.