NEW YORK, - The euro took off against the dollar on Friday, helped by comments out of Europe suggesting that Greece should be able to handle its heavy debt load.
The euro, however, hit a record low versus the Swiss franc, as did the dollar, indicating investors remained worried that sovereign debt problems in Europe, a divisive budget debate in Washington, and low U.S. interest rates that would hamper both currencies.
The euro's rally versus the dollar gained momentum in the New York session after a member of the European Central Bank Governing Council, George Provopoulos, said Greece will be able to repay its debt in full without restructuring if it sticks to an austerity plan. For details,
The comments by Provopoulos, who is also head of Greece's central bank, were followed by remarks from French President Nicolas Sarkozy, who said France would defend and support the euro. Sarkozy also said the country opposed any kind of debt restructuring for Greece.
Swiss Exports
Switzerland’s economy is showing few signs of slowing down as the lowest unemployment rate in more than two years bolsters household demand and booming Asian markets fuel export growth. Nestle SA (NESN), the world’s biggest food company, last month forecast profitability to improve in the second half and the Organization for Economic Cooperation and Development said on May 25 the economy is showing a “strong recovery.”
The International Monetary Fund said yesterday that Swiss gross domestic product may rise 2.4 percent this year and 1.8 percent in 2012, after increasing 2.6 percent in 2010. The Swiss government will report first-quarter GDP on May 31.
The franc is considered a haven currency, along with the dollar and the yen, even as their growth and fiscal outlooks differ because Swiss, American and Japanese investors tend to invest abroad and send money home during crises, according to UBS AG.
The bank estimated that Swiss unit trusts have around 70 percent of their total assets in foreign investment, compared with 45 percent among similar Japanese assets and around 25 percent for U.S. mutual funds. Financial funds in the euro region have less than 20 percent of their assets in foreign countries.
Swiss government bonds were little changed, with 10-year note yield at 1.82 percent. Swiss securities handed investors a 1.7 percent gain this month, compared with a 1.6 percent return from German debt and a loss of 1.7 percent from Greek bonds, according to indexes compiled by the European Federation of Financial Analysts Societies
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