The pound strengthened to a five- week high against the euro after the imposition of a levy on bank deposits in Cyprus threatened to throw Europe back into crisis, fueling demand for U.K. assets as a haven.
U.S. stocks rose, rebounding from the worst drop since November, as data on housing and consumer confidence bolstered optimism in the economy. European shares slid with Italy’s bonds as the nation’s election stalemate spurred concern the debt crisis will worsen.
New Zealand’s central bank governor said he’s ready to intervene in foreign-exchange markets, adding to comments by officials from South Korea to South America warning their currencies are too strong, even as Group-of-20 nations say they’ll refrain from competitive devaluation.
The yen weakened, extending losses that have made it the worst-performing major currency in the past three months, after Group-of-20 nations refrained from criticizing Japanese policies driving the decline.
Investors have begun to flee the euro in preference for the U.S. dollar amid fears that the European debt crisis may worsen, Morgan Stanley’s Global Head of Foreign Exchange Hans Redeker said in an interview in the Handelsblatt.
Hans Redeker , who was hired as Morgan Stanley’s head of foreign-exchange strategy in March, said he plans to revise the bank’s euro forecast “substantially lower” on weak demand for European bonds and equities.
With the euro facing one of the most pivotal months in its 13-year history, traders and strategists are more divided than at any time since 2011 over whether officials will be able to keep the currency from tumbling.