LONDON Dec 5 The euro hit a 2-1/2-week high of
$1.0730 in morning trade in Europe on Monday, up half a
percent on the day after recovering strongly from falls
following Italy's vote to reject government proposals for
Traders said the bounce looked chiefly due to over-extended
bets against the single currency and investors choosing to cash
in gains in an initial 1 percent slide after the referendum,
which is expected to see Prime Minister Matteo Renzi resign.
Bond and equity markets had also recovered ground after
"I think the euro is going to strengthen a lot now. I think
it is way oversold," said Nick D'Onofrio, chief executive at
London-based hedge fund North Asset Management.
"There's a view out there that the euro is going to blow up
and I don't buy it. Ultimately, yes, we do think it will weaken
in the longer term. But short-term I don't believe in this idea
that there is an imminent blowup."
(Writing by Patrick Graham, editing by Nigel Stephenson)