Euro rises vs dollar, plus reduced risk appetite for short bets

The euro rose on Monday as an improvement in the attractiveness of risky assets and the dollar hitting attack triggered a short hedges in the single currency, away from their recent lows of four years.

European shares rose sharply after rising in Asia. The U.S. stock futures were up 0.7 percent.

"The dollar was weaker overnight against the euro on the stability of the trust, which helped the currency recover more risk," said Geoffrey Yu, currency strategist at UBS.

"Equity markets globally are performing strongly, especially for supporting the expectation that the relatively expansionary policy will be maintained for a prolonged period globally," he added.

At 1115 GMT, the euro was up around 1 percent against the dollar at $ 1.2231, after touching an intraday high of 1.2258, according to Reuters data.

European shares gained 0.8 percent in early afternoon trading.

But analysts said it was unlikely that the recovery of the euro would take it out of its downtrend, as the structural problems in the euro area, which have impacted the currency has not changed.

"We've seen a good session for stocks. This is favorable to risk, driven by higher-yielding currencies like the Australian dollar. But fundamentally, nothing has changed against the euro," said Kenneth Broux, market economist at Lloyds Banking Group.

Traders said hedge funds have been reducing their short positions on a level of 1.2150 / $ 60 in Asia and across the 1.2220 in Europe.

The euro has lost 15 percent against the dollar so far this year, but gained 1.6 percent last week after hitting a floor of $ 1.1876, its lowest level since March 2006.

Some commented that the appetite for risk was also supported by the authorities such as the chairman of the Federal Reserve Bank of St. Louis Federal, James Bullard, who said he is running a strong global economic recovery.

The Australian dollar advanced almost 1 percent against the dollar to more than 0.8600, its highest level in a month.

The euro was up 1.4 percent to more than 112 yen for the first time in a week.

The dollar fell more than 1 percent against a basket of currencies to 86.446.

Analysts said the dollar could be undermined by so-called U.S. President Barack Obama and his advisers for more incentives to support the economy.

The pound sterling was up 1.2 percent against the dollar at $ 1.4718.

Euro rises vs dollar on U.S. employment report expected

The euro rose against the dollar Friday in a small volume, pending the report on the state of the U.S. labor market, while the yen fell after sources said the Bank of Japan may consider more monetary easing measures.

The data on U.S. payrolls, which will be published at 1330 GMT, give clues about the pace of economic recovery, although bad weather in February could affect the numbers.
The consensus of analysts polled by Reuters was for a loss of 50,000 jobs in February.

Analysts believe that a figure better than expected boost to the dollar, while a worse than expected could be dismissed as the effect of the snowstorms, which would limit any adverse impact on the currency.
"The market is looking for signs of impending cyclical upturn in the U.S. and a number on the payroll could point to that," said Peter Wuyts, analyst at KBC in Brussels.

"But the climate is difficult to predict the numbers do not surprise me to market uncertainty following the release, implying that the current pattern of consolidation in the euro / dollar would continue into next week," he added.
In London, the euro was up 0.1 percent against the dollar at $ 1.3588, in a small volume before the employment report, while the dollar index was steady at 80.547.

Wuyts KBC said the strengthening of the euro over a minimum of nine months and through $ 1.3432, reached this week, suggests that the market has now absorbed most of the bad news coming from Greece.

Athens sold on Thursday with a high demand a 10-year bond, a day after he announced new austerity measures.

However, concern still awaiting a meeting between Greek Prime Minister George Papandreou, and German Chancellor Angela Merkel.Meanwhile, the yen fell after sources said the Japanese central bank would discuss this month a new flexibility in its monetary policy amid government pressure to exit deflation.

"Statements on the Bank of Japan should have an impact on the yen and believe that the dollar / yen will be around 90.30 yen in the next couple of days," said Carl Hammer, a strategist at SEB in Stockholm.
The euro rose 0.3 percent to 121.36 yen while the dollar appreciated to 89.31 percent as yen, recovering from a three-month low of 88.14 yen reached the previous day.