By Leah Schnurr
NEW YORK, Feb 11 (Reuters) - The euro rose on Monday as a
European policymaker dismissed talk of intervening to weaken the
currency, while U.S. stocks were unable to get further traction
after hitting multi-year highs.
Tensions over whether some countries are deliberately trying
to weaken their currencies were in focus, with French Finance
Minister Pierre Moscovici saying euro zone countries need closer
cooperation on exchange rate policy.
But that was offset by comments from European Central Bank
policymaker Jens Weidmann, who said that discussions about an
overvaluation of the euro are simply a diversion from
governments' task of sorting out their economies. He said the
euro was not overvalued.
After three days of declines against the dollar, the euro
was lifted by investors looking to buy at low levels, and the
currency accelerated its gains after Weidmann's remarks.
'The idea of being interventionist in currencies is not
particularly new. But at the moment, because some of the bigger
players are at the forefront, it feels like a much more pressing
issue for markets,' said Daragh Maher, FX strategist at HSBC.
The euro was up 0.4 percent at $1.3411 as speculators bought
into the earlier dip to near three-week lows.
European Central Bank President Mario Draghi suggested last
week that further euro strength could lead to an interest rate
cut. French President Francois Hollande has also urged the euro
zone to set an exchange rate target.
The Group of Seven major industrial nations may be about to
add its weight to the debate in an effort to cool the rhetoric.
Two G20 officials told Reuters the group was considering making
a statement this week reaffirming a commitment to
'market-determined' exchange rates.
G20 finance ministers and central bankers meet in Moscow on
Friday and Saturday.
'The G20 meeting in Moscow this week seems certain to focus
on 'currency wars' but beyond a bland call for countries not to
engage in competitive devaluations, it's hard to see what
concrete steps can be taken at this stage,' said Kit Juckes, FX
strategist at Societe Generale in London.
The fear of competitive devaluations by major economies has
been building since new Japanese Prime Minister Shinzo Abe began
putting pressure on the country's central bank to take
aggressive easing measures to revive the nation's economy.
Wall Street was little changed as a lack of major economic
news on Monday gave investors little reason to push the market
higher, for now.
Markets showed little reaction to a speech from Federal
Reserve Vice Chairman Janet Yellen. Seen as a potential
successor to Fed Chairman Ben Bernanke next year, Yellen said
the central bank's aggressive and ongoing easing of monetary
policy is warranted given the state of the labor market.
Investors will get some insight into President Barack
Obama's plan for spurring the economy in his State of the Union
address on Tuesday.
Encouraging U.S. and Chinese data last week helped push U.S.
equities higher, sending the tech-focused Nasdaq to a 12-year
closing high and the S&P 500 to a five-year peak.
Less than two months into the year, the S&P 500 is up more
than 6 percent, but the rally has stalled with the S&P and Dow
industrial indices near record highs.
'It's really the valuation and indications that the economy
is improving that have pushed the market higher,' said Tim
Ghriskey, chief investment officer at Solaris Asset Management.
'We would have to see a probable correction before heading
higher and that could come from weak economic data in the
In mid-afternoon trading, the Dow Jones industrial average was off 29.20 points, or 0.21 percent, to 13,963.77. The
Standard & Poor's 500 Index slipped 1.69 points, or 0.11
percent, to 1,516.24. The Nasdaq Composite Index edged
down 5.24 points, or 0.16 percent, at 3,188.64.
Google weighed on the market after the company said
in a filing that Executive Chairman Eric Schmidt is selling
roughly 42 percent of his Google stake. Google's shares fell 0.8
percent to $778.73.
The benchmark 10-year U.S. Treasury note was up
1/32 to yield 1.948 percent.
MSCI's world equity index was down 0.3
percent, and the pan-European FTSEurofirst 300 index
ended down 0.7 percent.
Brent crude prices trimmed losses after earlier dropping
below $118 a barrel as concern about the euro zone economy
eclipsed stronger-than-expected demand growth in China. Trade
data out of China had sent Brent crude to a nine-month high on
Brent crude fell 76 cents to $118.14 a barrel. U.S.
crude futures gained $1.31 to $97.03, narrowing the
spread between higher priced Brent futures and their U.S.
counterpart after it widened last week.
(Additional reporting by Richard Hubbard, Ron Bousso and Anooja
Debnath in London, Angela Moon and Julie Haviv in New York;
Editing by Kenneth Barry)
((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com
* BridgeStation: view story .134
For more information on Top News: http://topnews.reuters.com)
To read Reuters Global Investing Blog click on
for the MacroScope Blog click on
for Hedge Fund Blog Hub
click on http://blogs.reuters.com/hedgehub)
(For the state of play of Asian stock markets please click on:)
Copyright Thomson Reuters 2013. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.