Euro Gains Before German Data Seen Showing Consumer Confidence, Price Rise

The euro rose to a one-week high against the yen before reports that economists said will show German prices and consumer confidence rose.

Europe’s currency advanced against 12 of its 16 major counterparts on optimism a bailout for Ireland will prevent contagion across the region’s larger debt markets. The dollar was near a six-week high against the yen as a report is forecast to show the U.S. economy expanded more in the third quarter than the government initially reported. The yen extended losses against major counterparts as gains in stocks and commodities damped demand for Japan’s currency as a refuge.

“Ireland, Portugal and other nations will be OK because macro data in Europe are not that bad,” said Junichi Makino, a Tokyo-based senior economist at Daiwa Institute of Research Ltd. “The euro will be supported as long as the region’s economy is resilient and exports advance.”

The euro rose to 114.08 yen as of 9:12 a.m. in Tokyo from 113.95 yen in New York yesterday. It earlier touched 114.13 yen, the highest since Nov. 8. The shared currency fetched $1.3655 from $1.3643, after rising 0.8 percent yesterday.

The dollar was at 83.54 yen from 83.52 yen, after touching 83.79 yen yesterday, its strongest level since Oct. 5. The U.S. currency has advanced 1.2 percent against the yen this week.

Prices, Confidence

German producer prices gained 4.1 percent in October from a year ago after rising 3.9 percent in September, according to a Bloomberg News survey of economists before today’s data. The nation’s consumer confidence may advance to 5 in December from 4.9 this month, another survey showed before GfK AG, a market research company, releases the data on Nov. 23.

The euro gained after Ireland’s central-bank governor, Patrick Honohan, said he expects the country to seek a package worth “tens of billions” of euros to help rescue Irish banks battered by the country’s property slump. Officials of the European Union, International Monetary Fund and European Central Bank yesterday started to study the banks’ books.

“Progress towards a possible loan package for Ireland from the EU and IMF is helping to buoy market sentiment,” said Khoon Goh, head of market economics and strategy at ANZ National Ban k Ltd. in Wellington. “This is likely to be positive for the euro.”

Spain sold 3.65 billion euros ($4.98 billion) of bonds at an auction yesterday at lower yields than similar traded securities.

The dollar headed for a third weekly gain against the yen as the U.S. economy expanded at a 2.4 percent annual rate in the third quarter, compared with a 2 percent increase initially reported, according to economists surveyed by Bloomberg before the data due on Nov. 23.

The yen dropped as the MSCI Asia Pacific Index of regional shares advanced 0.6 percent. The Standard & Poor’s 500 Index rose 1.5 percent, and the Reuters-Jefferies CRB Index of raw materials climbed 2.4 percent yesterday.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net.

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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