Euro holds near $1.30

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Euro holds near $1.30

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The euro is holding its strength for the moment, having hit $1.30 due to an easing of concerns about euro zone countries possibly defaulting on their debt and more bad news on the US economy pulling down the dollar.

The single European currency is up by 9.5 percent from its four-year low of just over $1.18 on 7 June.

However the euro’s recent rebound has made the region’s exports more expensive.

And that has had an effect on growth in weaker European economies, such as Spain, which have become more reliant on exports for growth.

The concerns over euro zone sovereign debt had boosted interest in gold as a safe haven against currency volatility.

Falling production of the precious metal has also boosted prices.

Demand for gold for jewellery continues strong in countries like India and China.

In the first three months of this year India was the world’s biggest consumer of the metal – more than 193 million tons.

Gold hit of record high close to $1294.90 an ounce in late June but has struggled to hold its ground since then.