The euro strengthened for a third day against the dollar after a German report showed Europe's largest economy unexpectedly expanded in the second quarter, adding to signs the global recession is abating. Germany's Federal Statistics Office said today gross domestic product expanded a seasonally adjusted 0.3 percent from the previous three months, when it slumped a record 3.5 percent.
Europe's currency also gained for a second day versus the yen before a European report that economists said will show the contraction in the 16-nation region slowed last quarter. The dollar fell against 14 of the 16 major currencies after the Federal Reserve said it will keep interest rates low for an "extended period," diminishing the appeal of U.S. assets. The Fed also said in its statement following its two-day meeting yesterday that the economy is "leveling out." and indicated it will wind down purchases of Treasuries that had been slated to end in September. The central bank has left its target rate for overnight lending between zero and 0.25 percent since December.
The euro strengthened to $1.4268 as of 7:38 a.m. in London from $1.4188 yesterday in New York. It advanced to $1.4447 on Aug. 5, the highest level since Dec. 18. Europe’s currency climbed to 137.24 yen from 136.32 yen. The yen traded at 96.15 per dollar from 96.06.
