BLBG:Yen Touches 16-Month Low Versus Euro Before Japan CPI
The euro strengthened toward an eight-month high versus the dollar after French consumer confidence unexpectedly improved this month, underpinning demand for the region’s assets.
Europe’s shared currency climbed against 13 of its 16 major counterparts after Italian business confidence also increased. The yen dropped to a 16-month low against the euro before data tomorrow that economists said will show Japanese consumer prices declined, fueling speculation Prime Minister Shinzo Abe will push the central bank to add stimulus. The dollar weakened as U.S. lawmakers return to Washington to try to craft a deal to avert the so-called fiscal cliff.
“We aren’t in as desperate times as we were in the middle of this year and there’s some upward pressure on the euro,” said Simon Smith, chief economist at FxPro Group Ltd. in London. “With the yen being under pressure, the euro is benefiting. The market is looking with a certain degree of caution at the yen because the politicians are talking tough.”
The euro appreciated 0.3 percent to $1.3267 at 10:23 a.m. London time after rising to $1.3308 on Dec. 19, the highest since April 3. The common currency gained 0.4 percent to 113.73 yen after reaching 113.84 yen, the most since Aug. 4, 2011. The yen fell 0.1 percent to 85.74 per dollar.
An index of French household sentiment rose to 86 in December from 84 in November, the first monthly increase since May, national statistics office Insee said from Paris. Economists forecast an unchanged reading of 84, according to a Bloomberg News survey.
President Barack Obama and U.S. Congress return to Washington today to resume negotiations over the fiscal cliff of more than $600 billion in automatic tax increases and spending cuts set to take effect next month. Treasury Secretary Timothy F. Geithner said there’s “significant uncertainty” around tax and spending policies, according to a letter he sent to congressional leaders yesterday.
To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net.
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
