Euro Gains Beyond $1.30 on Speculation Spain Will Request Aid
The euro rose above $1.30 for the first time in a week as German investor sentiment improved more than economists predicted and amid speculation that Spain is moving toward asking for financial assistance.
Europe’s 17-nation currency strengthened for a fourth day versus the yen as Spain’s government bonds rose after Germany was said by two senior coalition lawmakers to be open to providing the a precautionary credit line from Europe’s rescue fund. The dollar and the yen fell against most of their major counterparts before a U.S. report that economists project will show improvement in industrial production, damping demand for the safest assets. The pound fell against the euro as U.K. inflation slowed to the least in almost three years.
“There’s a lot of news going around this morning suggesting that there will be some kind of help in the very near future for Spain,” Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc. in New York, said in a telephone interview. “That’s helping the euro.”
The euro climbed 0.8 percent to $1.3055 at 8:31 a.m. New York time, after reaching $1.3059, the strongest level since Oct. 5. Against Japan’s currency, it gained 1.2 percent to 103.08. The yen slipped 0.4 percent to 78.93 per dollar.
Europe’s common currency has gained 0.8 percent in the past week, trailing behind the Swiss franc and Sweden’s krona among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. That cut its decline this year to 1.8 percent. The yen has fallen 5.3 percent in 2012.