BLBG:Euro Gains After Greece Bailout Vote, Before German PMI
The euro advanced against the dollar and reached a four-month high versus the yen after Greece won parliamentary approval for a new international bailout, boosting demand for European assets.
The 17-nation currency rose against most major peers before reports tomorrow forecast to show an expansion of services and factory output in Germany, Europe’s largest economy. The dollar weakened before Federal Reserve Chairman Ben S. Bernanke tells Congress that financial strains in Europe have eased, according to testimony prepared for delivery today. Demand for the yen was limited before data tomorrow projected to show Japanese exports declined for a fifth month.
“Some of the reports coming out of Europe and the Greek vote going through is supportive of the euro in the near term,” said Derek Mumford, a director in Sydney at Rochford Capital, a currency-risk management company.
The euro rose 0.4 percent to $1.3276 as of 7 a.m. in London. The shared currency climbed 0.2 percent to 110.97 yen and earlier touched 111.17, the most since Oct. 31. The yen traded at 83.59 per dollar from 83.70.
Greek Prime Minister Lucas Papademos won approval for a 130 billion-euro ($172 billion) aid package. A total of 213 lawmakers voted today in favor of the legislation and 79 against, Acting Parliament Speaker Grigoris Niotis said in remarks carried live on state-run Vouli TV.
German Economy
Demand for the euro was also supported before the release of purchasing managers indexes tomorrow from London-based Markit Economics predicted to show German manufacturing and services growth accelerated. A measure of factory output climbed to 51 this month from 50.2 in February while a gauge of services rose to 53.1 from 52.8, according to median projections in Bloomberg News surveys of economists.
The euro may extend gains against the Australian dollar, JPMorgan Chase & Co. said, citing trading patterns.
The common currency may climb toward A$1.2775, around the 38.2 percent retracement of the euro’s decline from the Nov. 23 high of A$1.3810 to the Feb. 7 low of A$1.2133 on the Fibonacci chart, Niall O’Connor, a New York based technical analyst at JPMorgan, wrote in a note to clients today.
The shared currency rose 0.1 percent from yesterday to A$1.2633, after earlier touching A$1.2660, the strongest since Jan. 2.
The euro has climbed 0.9 percent in the past month, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The greenback advanced 0.5 percent, and the yen weakened 4.6 percent.
Japanese Trade
Japanese exports dropped 6.5 percent in February from a year earlier, following a 9.3 percent decline the previous month, the Ministry of Finance is projected to say tomorrow, according to a Bloomberg poll of economists.
“We’re starting to see a persistent trade deficit take hold in Japan, and that’s reducing appetite for the yen,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency margin company.
The South Korean won and Indonesian rupiah fell as Asian stocks declined and on concern China’s slowing economy will damp demand for exports from Asia.
“The market has got in its mind the recovery in the U.S. is stronger than it is in Asia,” said Gavin Stacey, chief interest-rate strategist at Barclays Capital Inc. in Sydney. “While the market has that mindset, the U.S. dollar strength relative to Asian currencies” is likely to continue, he said.
The won dropped 0.4 percent to 1,129.50 per dollar and touched 1,129.75, the least since March 15. Indonesia’s rupiah fell 0.1 percent to 9,182 per dollar. The MSCI Asia Pacific Index of stocks weakened 0.6 percent, declining for a second day.
U.S. Recovery
The dollar has been supported as data signaled the U.S. recovery is gathering momentum, reducing prospects that the Fed will engage in further asset purchases, or quantitative easing, to stimulate the economy.
An industry report today is forecast to show U.S. home sales rose to the highest level since May 2010. Sales of previously owned homes are predicted to have climbed 0.9 percent to a 4.61 million annual rate, according to a Bloomberg survey of economists before today’s report from the National Association of Realtors.
The pound strengthened today before U.K. Chancellor of the Exchequer George Osborne delivers his annual budget and the Bank of England releases minutes of its March 8 policy meeting. The Monetary Policy Committee this month voted to keep the benchmark rate unchanged at 0.5 percent and to maintain the central bank’s bond-purchase plan at 325 billion pounds.
“The likelihood is that most MPC members are content with current policy,” Mitul Kotecha, head of global currency strategy in Hong Kong at Credit Agricole CIB, wrote in a research note today. “The minutes of the MPC meeting may sound less dovish,” giving support to sterling.
The U.K. currency fetched $1.5889 from $1.5863 yesterday.
To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
