Euro up on ECB hopes; hurricane jitters lift oil

Tue Aug 28, 2012 4:30pm EDT
 
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By Rodrigo Campos

NEW YORK (Reuters) - The euro rose against the U.S. dollar on Tuesday on bets the European Central Bank will soon act to tackle the bloc's debt crisis, while U.S. crude oil prices rallied as Hurricane Isaac approached the Gulf Coast.

Stocks were little changed on Wall Street as mixed data gave investors little indication whether Federal Reserve Chairman Ben Bernanke might signal more economic stimulus from the Fed when he speaks on Friday. Trading was very light, the third-lowest volume for a full session so far this year.

U.S. crude prices settled 0.9 percent higher as Hurricane Isaac made its way through the Gulf of Mexico, forcing companies to close down oil rigs and refineries.

Investors were looking ahead to Bernanke's speech on Friday at an annual meeting of central bankers in Jackson Hole, Wyoming, where clues on more stimulus could translate into a weaker U.S. dollar.

The European Central Bank said its president, Mario Draghi, will not attend the conference due to a heavy workload, news that gave further support to the euro.

Draghi's absence is seen as a hint that "he will be busy finalizing the details of policy proposals to be unveiled in the coming weeks," according to Nick Bennenbroek, head of currency strategy at Wells Fargo Bank. The ECB will meet on September 6.

The single currency rose 0.55 percent to $1.2568.

Upbeat U.S. housing data made it harder for investors to determine if the Fed will announce further stimulus to the U.S. economy, a bet that has supported a recent rally in equities and other risk assets.   Continued...

 
A Tokyo Stock Exchange employee looks up at a monitor displaying market indices at the bourse in Tokyo June 18, 2012. REUTERS/Yuriko Nakao