The euro strengthened to the highest level in three weeks versus the dollar after data showed German business confidence rose in November, boosting optimism that Europe’s biggest economy is weathering the region’s slowdown. The 17-nation shared currency headed for a weekly gain versus most of its 16 major peers. It was poised to advance the most against the yen on speculation Europe’s policy makers will agree to keep aid flowing to Greece when they meet in three days’ time. The Japanese currency strengthened against the dollar as a technical indicator signaled its decline this week may have been too rapid. Sweden’s krona advanced amid strong demand for higher-yielding assets. “The uptick in confidence is reasonably substantial and that’s constructive for Germany and for the euro area as a whole, keeping the euro relatively well-bid,� said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “Assuming the politicians get a deal done on Greece, then there’s some potential for the euro to move higher.� The euro rose 0.1 percent to $1.2900 at 7:03 a.m. New York time, after reaching $1.2915, the highest since Nov. 2, and extending its weekly gain to 1.2 percent. Europe’s shared currency slipped 0.1 percent to 106.116 yen, still poised for a five-day advance of 2.5 percent. Japan’s currency appreciated 0.2 percent to 82.31 per dollar, trimming its decline from Nov. 16 to 1.2 percent. Sweden’s krona strengthened 0.3 percent to 6.6607 per dollar. Business Climate Europe’s shared currency may climb to its September high against the dollar of $1.3172 should it rise above the Oct. 31 high of $1.3021, analysts at Landesbank Hessen-Thueringen in Frankfurt including Ralf Umlauf wrote in a note to clients. The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 101.4 from 100 in October for its first gain in eight months. Economists predicted a drop to 99.5 according to the median of 48 forecasts in a Bloomberg News survey. Euro-region finance ministers will meet on Nov. 26 to discuss ways to unlock international loans for Greece and prevent it from dropping out of the shared currency. The nation has been negotiating with euro-area politicians and the International Monetary Fund over the steps needed to qualify for the release of loan installments frozen since June. ‘Some Optimism’ “There has been some optimism seeping back into the euro,� said Jane Foley, a senior currency strategist at Rabobank International in London. “Nobody anticipates that Greece will be allowed to become a dominant factor for the market. From here, the gains for the euro could be a little bit tougher.� The euro has strengthened 2.3 percent over the past three months, making it the best performer among the 10 developed- nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen is the worst performer, dropping 5.7 percent, and the dollar has fallen 0.6 percent. The yen climbed against the dollar after its relative strength indicator signaled it may have fallen too far. The index was at 26, its fifth-straight day below the 30 level that some traders see as a sign an asset is about to change direction. Japan’s currency still headed for a second weekly decline against the dollar as opposition leader Shinzo Abe, who is favored to become the country’s next prime minister after elections on Dec. 16, increased pressure on the Bank of Japan (8301) to add to stimulus measures that tend to weaken the yen. “We believe the yen will start on a multi-year weakening trend,� Thanos Papasavvas, a fixed-income and currency strategist at Investec Asset Management said in an interview on Bloomberg Television’s “On The Move� with Francine Lacqua. “The most underweight currency we have is the Japanese yen because of the continuing uncertainty in the political environment.� 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

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