Forex - EUR/JPY gains as Europe buttresses firewall
Published Mar 30, 2012 03:20PM ET
In U.S. trading on Friday, EUR/JPY hit 110.49, up 0.73%, up from a low of 109.40 and off a high of 110.55.
The pair sought to test support at 108.79, Thursday's low, and resistance at 111.25, Tuesday's high.
In Europe, policymakers agreed to hike a combined lending ceiling for two rescue funds to EUR700 billion from EUR500 billion, a move aimed to keep the debt crises from spreading further across the continent.
News that Spanish Prime Minister Mariano Rajoy is planning to roll out the most austere budget the country has seen since returning to democracy in 1978 also buoyed the euro, as did healthy eurozone inflation rates, which rose 2.6% in March, better than forecasts for a 2.5% gain.
In the U.S. signs that consumers are looking ahead with greater optimism lured investors out of the safety of the dollar and into stocks and other currencies, the euro especially.
The Thomson Reuters/University of Michigan's consumer sentiment index for March rose to 76.2, the highest in over a year and up from 75.3 in February, outpacing analysts' expectations.
Furthermore, the Commerce Department reported that personal spending in the U.S. rose 0.8% in February, the most in seven months and above expectations for a 0.6% gain, although incomes rose only 0.2%, a slightly less than expected.
The Japanese currency weakened, meanwhile, in line with government policy.
The Bank of Japan is taking steps to weaken is currency, whose strength is crimping exports.
The euro was up against the pound and down against the Swiss franc, with EUR/GBP up 0.01% at 0.8337 and EUR/CHF down 0.12% at 1.2039.
On Monday in the U.S., the Institute of Supply Management will release its Manufacturing Purchasing Managers Index, while in Europe, German, French and Spanish manufacturing figures are due out as well.
Eurozone unemployment figures will also be released.
In Japan, the Tankan Large Manufacturing Index will be released on Sunday, while on Monday, the Bank of Japan will release data on the country's monetary base as well as on average cash earnings.
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Written By: Investing.com
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