The euro recovered above $0.90 US in Asia Thursday after investors decided they had over-reacted to a disappointingly weak German business confidence survey, traders said.
"There was too much selling following the Ifo survey and investors are now buying back the euro," said Mitsuru Sahara, vice-president of Sanwa Bank's foreign exchange division.
"We are seeing a technical rebound of the euro," he said.
The euro traded at $0.9026 around 2:00 p.m. (0500 GMT), up from $0.9010 in New York and $0.8939 in Tokyo late Wednesday.
The euro also traded at 96.64 Japanese yen, against 96.48 in New York and 96.00 in Tokyo Wednesday.
On Tuesday investors dumped the common European currency after the Ifo business survey showed the lowest level of sentiment since last November.
But the euro could slip back below $0.90 in the absence of any fresh supportive factors, dealers said.
"There's no strong trend emerging yet," said a dealer at BNP Paribas in Singapore.
Against the dollar, the yen was edging up on the back of rising Tokyo share prices.
The yen was quoted at 107.05-08 to the dollar at 2:00 p.m., up from 107.12 yen in New York and 107.40 yen in Tokyo late Wednesday.
"Buying sentiment was firm, reflecting the sharp increase in the Nikkei index this morning," said Sahara.
The Tokyo Stock Exchange's key Nikkei-225 index jumped 331.11 points, or 2 percent, to end the morning session at 16,767.76.
"We are seeing steady demand for the yen among foreign investors on prospects for better corporate earnings," said Sahara.
On Monday electronics giant Toshiba Corp. upgraded its earnings forecast for the year to March because of strong demand for microchips and its restructuring efforts.
"Toshiba's upgrade encouraged foreign investors to buy up the yen," the dealer said. — (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
