The euro rose toward a nine-month high against the dollar before a government report forecast to show French industrial production increased for a third month in July, boosting demand for higher-yielding assets.
Europe’s single currency advanced against 13 of its 16 major counterparts on expectations Federal Reserve officials will today signal they plan to refrain from raising interest rates. The yen dropped to the lowest level in almost two weeks against the euro before a report this week forecast to show Japanese consumer confidence rose for an eighth month, paring demand for the currency as a refuge.
“Risk appetite is coming back on the table, supporting the euro,” said Susumu Kato, chief economist in Tokyo at Calyon Securities, the investment banking unit of Credit Agricole SA. “The euro is also benefiting from uncertainty about the U.S. economy. The euro-zone is likely to see a hike in interest rates before the U.S. does.”
The euro traded at $1.4497 at 11:13 a.m. in Tokyo from $1.4478 in New York yesterday, when it reached $1.4535, the highest level since Dec. 18. The dollar was at 92.37 yen from 92.32 yen. The yen fell to 133.90 per euro from 133.67, after earlier reaching 134.17, the lowest level since Aug. 28.
“Global growth indicators remain supportive for risk takers,” analysts led by Hans-Guenter Redeker, London-based global head of currency strategy at BNP Paribas SA, wrote in a research note yesterday. “The dollar will remain under selling pressure.”
**Please note the above data is of the Euro / Dollar ETF FXE**