Euro rises on ECB plan to buy eurozone bonds

TOKYO – The euro rose against the dollar in Asia early Monday after the European Central Bank said it would make major purchases of eurozone government bonds.

The euro briefly rose past $1.4370 at 2200 GMT Sunday on the ECB announcement of the major purchases plan. It was trading at $1.4361 in Tokyo late morning trade.

The euro was changing hands at $1.4281 in New York late Friday, before US rating agency Standard & Poor’s cut the rating on US Treasuries from triple A to AA+ with a negative outlook, putting pressure on the dollar.

Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ, said the ECB decision was “positive” for the euro.

“The ECB stepped ahead to (signal) the purchase of Italian bonds despite objections,” she said.

The European Central Bank said it would make major purchases of eurozone government bonds in the latest move to stem a debt crisis that has world leaders scrambling for a global response.

The ECB said it would “actively” renew bond purchases after Italy and Spain announced new measures and reforms to boost their economies and France and Germany pushed for full and rapid implementation of terms agreed at an emergency summit last month.

Eurozone debt markets will be focused on any purchases of bonds issued by Italy and Spain, the third- and fourth-biggest eurozone economies, for signs of ECB activity.

The central bank itself never identifies which bonds it buys.