Euro up against dollar as stock markets perk up

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TOKYO: The euro rose against the dollar in Asia on Friday as investors' risk appetite improved on gains in stock markets, dealers said.

The euro rose to $1.4528 in Tokyo morning trading from $1.4509 in New York late Thursday. The European common currency was almost flat at 116.36 yen against 116.42 yen.

The dollar fetched 80.08 yen, down from 80.31 yen.

The euro showed some resilience against the greenback after its recent steep decline, dealers said.

It was also supported by improved risk sentiment as Asian stock markets posted gains following Wall Street's rise, said Teppei Ino, analyst at the Bank of Tokyo-Mitsubishi UFJ.

The European Central Bank on Thursday kept its main interest rate at 1.25 percent.

ECB president Jean-Claude Trichet said the bank's position on inflation was one of "strong vigilance" -- a code for future tightening of monetary policy in the eurozone.

While Trichet's remark was in line with market expectations, the euro came under pressure after the meeting.

"Trichet indicated a rate hike in July, but the ECB was rather tame with
its longer-term prospect for inflation," Ino said.

The dollar was weighed by selling from Japanese exporters after getting a boost Thursday when data showed the US trade deficit shrank sharply in April, with exports hitting a record and imports falling.

The US Commerce Department reported the trade deficit in goods and services fell to a seasonally adjusted $43.7 billion from $46.8 billion in March. That was the smallest gap in the year to date.

Japanese exporters are again showing interest in selling the dollar after going quiet on currency markets since the March earthquake, Osamu Takashima, chief FX strategist at Citibank Japan, said according to Dow Jones Newswires. (AFP)