The euro supported by market rumors.

Keywords: euro, Central Banks, Brussels, BERLIN, ECB.

The European currency has won nearly 3% in three days. The wildest rumors stir the markets, as an intervention by the European Central Bank on foreign exchange markets to support the euro.

The Euro, the depreciation continues for six months more and more worried the United States and Asian countries, has taken the color Friday, stabilizing during the day at 1.2550 dollars, after a morning peak to $ 1.26, its highest level since one week.
This unexpected rebound, while stock markets were down, was not so much due to the hopes raised by the meeting of finance ministers of Twenty-Seven, Brussels, Berlin or vote on the bailout of euro, as a new market rumor. While the European currency hit May 18, its lowest level in four years against the greenback at $ 1.22, some investors speculate on a possible central bank intervention to stem the fall in the G7.
"The ECB might act with other central banks if the euro falls too fast for her," stated yesterday in New York Michael Bordo, an economics professor, specialist in monetary matters. The last intervention in favor of the euro as of November 2000, when the European currency fell to 0.84 percent, barely a year after its launch. Since the beginning of the year, the euro has lost 13% against the dollar, which is not necessarily bad for exports. "The current level of the euro does not raise any concern," says one of the governors of the ECB's Ewald Nowotny.

Hedging:
"The euro is not in danger is obvious" adds Jean-Claude Trichet in an interview with Frankfurter Allgemeine Zeitung. "The market movements are a combination of investor sentiment and the influence of speculators such as hedge funds," says the president of the ECB.
After massive selling euros this week, selling contracts have reached record speculators have decided to buy the European currency, just in case ... "The rumors of intervention are excuses to cover themselves after Paris risky to down, "said Audrey Childe strategist in London.
Yesterday, only the Swiss National Bank continued its purchases of euros to counter the strong franc. The Bank of Japan remained silent on currencies. If the Japanese Ministry of Finance said vigilant against the yen, he said he was not expected that the G7 finance ministers this weekend discussing the market trends.