The Euro surged to five-month highs above 3 US cents in thin trade and also powered ahead against the yen, which was weakened by further glum Japanese economic data. The single European currency bought $ 0.9315 in late trading on Wednesday after rising to $ 0.9337 earlier – a level lot seen since late July. It was at 0.9307 in New York on Tuesday evening. The Euro also rose to 106.30 Yen from 105.73 in New York. The Yen meanwhile slumped to 16-month lows against the Dollar, in response to grim data on Japanese industrial output, which contracted by 0.8 percent in November from figures for October. The Dollar bought 114.26 Yen, compared to 113.61 in New York.
It is the same story really, Euro stronger, Yen weaker on its way to break the 115 (Yen)-Dollar level and still at its lowest level since August 1999, Said currency strategist Paul Bednarczyk at the 4cast financial analysis agency. “The market is thin, there are few orders and people don't want to be short on Euros,” he added. The Euro has now gained 13 percent against the Dollar since it plunged to its historic low point against the greenback of $ 0.8230 on October 26.
Many analysts are predicting further appreciation for the Euro, particularly with lower oil prices meaning cheaper crude imports for the 11-nation Euro-zone. The market now expects the currency to test the next important threshold of resistance -- 96 US cents.

Bureau Report