Investing.com - The euro rose to a three-day high against the yen on Monday, after an unexpected drop in U.S. pending home sales while reports Germany will agree to combine the euro zone’s two bailout funds eased concerns over the handling of the region’s debt crisis.
EUR/JPY hit 110.55 during U.S. morning trade, the pair’s highest since March 21; the pair subsequently consolidated at 110.42, climbing 1.04%.
The pair was likely to find support at 109.00, the low of March 16 and resistance at 111.42, the high of March 21 and a five-month high.
The U.S. National Association of Realtors said its pending home sales index fell by 0.5% in February, confounding expectations for a 1.0% gain and signaling that the recovery in the housing market remains uneven.
But demand for the euro remained supported after Chancellor Angela Merkel gave her first indication that that Germany could agree to combine the region’s two bailout funds, the European Financial Stability Fund and the European Stability Mechanism.
Euro zone finance ministers are to meet on Friday to discuss enlarging the region’s financial firewall by combining the EUR440 billion EFSF and the EUR500 billion ESM to give a total fund of EUR700 billion to fight the debt crisis.
The euro also strengthened after Federal Reserve Chairman Ben Bernanke said in a speech that further monetary accommodation is needed to bring about big gains in the U.S. jobs market, which he described as “far from normal”, despite a recent improvement.
Sentiment waned earlier after Italian Prime Minister Mario Monti warned over the weekend that the threat of contagion from Spain could cause the debt crisis in the euro zone to flare up again.
Concerns over Spain overshadowed a report showing that German business confidence improved in March.
The yen was also lower against the U.S. dollar with USD/JPY rising 0.65%, to hit 82.88.
Later in the day, European Central Bank President Mario Draghi was to speak.
EUR/JPY hit 110.55 during U.S. morning trade, the pair’s highest since March 21; the pair subsequently consolidated at 110.42, climbing 1.04%.
The pair was likely to find support at 109.00, the low of March 16 and resistance at 111.42, the high of March 21 and a five-month high.
The U.S. National Association of Realtors said its pending home sales index fell by 0.5% in February, confounding expectations for a 1.0% gain and signaling that the recovery in the housing market remains uneven.
But demand for the euro remained supported after Chancellor Angela Merkel gave her first indication that that Germany could agree to combine the region’s two bailout funds, the European Financial Stability Fund and the European Stability Mechanism.
Euro zone finance ministers are to meet on Friday to discuss enlarging the region’s financial firewall by combining the EUR440 billion EFSF and the EUR500 billion ESM to give a total fund of EUR700 billion to fight the debt crisis.
The euro also strengthened after Federal Reserve Chairman Ben Bernanke said in a speech that further monetary accommodation is needed to bring about big gains in the U.S. jobs market, which he described as “far from normal”, despite a recent improvement.
Sentiment waned earlier after Italian Prime Minister Mario Monti warned over the weekend that the threat of contagion from Spain could cause the debt crisis in the euro zone to flare up again.
Concerns over Spain overshadowed a report showing that German business confidence improved in March.
The yen was also lower against the U.S. dollar with USD/JPY rising 0.65%, to hit 82.88.
Later in the day, European Central Bank President Mario Draghi was to speak.