BLBG:Euro Strengthens Against Dollar, Yen on Bets German Confidence to Increase
The euro climbed against the dollar and the yen before a report analysts say will show German business confidence rose to the highest in seven months.
The dollar dropped against 13 of its 16 most-traded counterparts ahead of a speech tomorrow by Federal Reserve Bank of New York President William Dudley who last month said policy makers will support a U.S. recovery. The Ifo institute’s business climate index for Germany climbed to 108.8 from 108.3 in January, according to the median estimate of economists in a Bloomberg News survey. That would be the fourth-straight gain and the highest value since July.
“The Ifo numbers will be the test of the euro zone’s economic resilience,” said Chris Walker, a currency strategist at UBS AG in London. “There’s still a lot of economic uncertainty in the region, but a strong Ifo reading should at least on the margin help to support to euro.”
The euro rose 0.4 percent to $1.3296 at 8:27 a.m. London time. The 17-nation currency gained 0.2 percent to 106.56 yen. The dollar fell 0.2 percent to 80.17 yen.
The Ifo institute’s business climate index for Germany is based on a survey of 7,000 executives. The institute will release the report at 10 a.m. in Munich today. Germany’s Bundesbank said in its monthly report on Feb. 20 that the outlook for the economy has “improved perceptibly,” even though “risks relating to the sovereign-debt crisis remain.”
Dudley said the economy will probably slow this year due to “significant impediments,” and that the Fed “will continue to do its part in supporting the recovery.”
The Stoxx Europe 600 index of shares rose 0.2 percent, and the MSCI Asia Pacific Index weakened 0.1 percent after earlier falling as much as 0.6 percent.
“If the world is fine and we get good growth indicators, the U.S. dollar will go down because we know there’s plenty of liquidity out there,” said Khoon Goh, a senior currency strategist at ANZ National Bank Ltd. in Singapore. “Now that we’ve got Greece out of the way, the market can go back to focusing on fundamentals.”
To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Anchalee Worrachate in London at aworrachate@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
