The dollar rose to its highest in 3 weeks against the euro on Friday and is poised for its biggest gain in 3 months versus the single currency following the U.S. stock market rally on Thursday fueled optimism that the worst of the recession was over, while earlier comments from ECB President Jean-Claude Trichet increased speculation that the central bank cut rates from 1.25%, which are already at a record low.
Euro fell to 1.3090 in a holiday-thinned Asian session with only Tokyo open, as European and U.S. markets were closed for the Good Friday holiday. The single currency had traded as high as 1.3582 and 137.42 versus the dollar and yen respectively earlier in the week before falling on long liquidation, especially ahead of the long Easter weekend. ECB chief Trichet's comments on an interest rate reduction and possibility of new quantitative measures also led to cross selling of euro. Eur/jpy was trading at 132.00 while eur/gbp remained near a one-month low at 0.8954.
The Japanese yen was steady versus the dollar at around 100.45 after the early cross-inspired rebound from 99.31. The Nikkei-225 pared its early gains to end the day up 48 points or 0.5%, compared to Thursday's 246-point rise (3.1%) in the Dow.