Euro gains in London

The euro rose broadly in holiday thinned trade on Monday as a dim view of the US economy kept the US currency on the back foot, while the yen struggled in the wake of the latest Japanese interest rate cut.
The euro climbed in jerky trade, recovering from heavy losses against the dollar late last week as market participants were sceptical about whether a US bailout plan for the nation's comatose automakers would help steer the economy out of a deep recession.
Traders said that volumes were razor-thin in the lead-up to the Christmas and year-end holiday season, which was aggravating even the slightest moves in the currency markets. Still, many in the market said that demand for dollars remained low.
"The dollar view is so opaque at the moment, and the risk reward is at this time of year is not worth it unless you really have to trade," said Maurice Pomery, head of forex at IDEAglobal in London. Traders said an announcement by China's central bank to lower banks' lending and deposit rates by 27 basis points - its fifth rate cut since September - had limited initial impact on currency markets.
By 1137 GMT, the euro rose 0.2 percent to $1.3951. The pair recovered from a fall to as low as $1.3824 on electronic trading platform EBS on Friday to clock its biggest daily percentage loss against the dollar in almost two months.
Earlier on Monday, the pair rose roughly 1.5 percent to a session high of $1.4123, but remained a fair distance from $1.4720 touched last week on EBS, its highest since late September.
Against the yen, the euro was up 1 percent at 125.38 yen, while it climbed as high as 95.24 pence against sterling, inching closer to a record high of 95.56 pence hit last week. Despite its losses against the euro, the dollar rose 0.9 percent to 89.90 yen.
The yen struggled broadly after the BOJ cut key interest rates to near zero on Friday, which further reduced the currency's already low interest rate level to 0.1 percent. This helped to push higher-yielding currencies like the Australian and New Zealand dollars up roughly 1 percent each against the Japanese currency.