Investing.com - The euro extended gains against the U.S. dollar and the yen on Wednesday, amid speculation that the International Monetary Fund is looking at ways to enlarge its lending resources to insulate the global economy from the effects of Europe’s financial crisis.
During European late morning trade, the euro was sharply higher against the U.S. dollar, with EUR/USD advancing 0.71% to hit 1.2836.
The euro’s gains came amid media reports that the IMF wants to reach an agreement on enlarging its lending capacity to USD1 trillion, from the existing USD385 billion at a meeting of the Group of 20 nations due to take place at the end of February.
The euro faltered earlier after Fitch’s warned that Italy could face a two-notch downgrade.
The comments came after the ratings agency, which currently holds Italy at an A+ rating, said last week that there was a “significant” chance that Italy would be downgraded by the end of January.
The euro was also higher against the pound, with EUR/GBP climbing 0.49% to hit 0.8346.
In the U.K., official data showed that the unemployment rate unexpectedly rose to a 17-year high of 8.4% in December, from 8.3% the previous month.
The report also showed that the claimant count rose by a seasonally adjusted 1,200 in December, significantly below expectations for an increase of 8,000, indicating that the downturn in the labor market may be moderating.
The single currency was also higher against the safe haven yen, with EUR/JPY adding 0.61% to hit 98.45, after falling to 97.04 on Monday, the pair’s lowest level since December 2000.
Japanese Finance Minister Jun Azumi warned against the appreciation of the yen earlier, signaling his readiness to curb the currency’s gains, although he said Japan could not intervene in the same way Switzerland has.
Elsewhere, the euro was steady against the Swiss franc, with EUR/CHF dipping 0.01% to hit 1.2091.
A report earlier showed that the ZEW index of Swiss economic expectations rebounded to minus 50.1 this month, from minus 72.0 in December, the strongest increase since April 2011.
But the euro continued to struggle close to record lows against the Australian and New Zealand dollars, which found support on speculation that China is set to ease monetary policy, with EUR/AUD rising 0.26% to hit 1.2307 and EUR/NZD dipping 0.07% to hit 1.5900.
In Australia, report showed that consumer sentiment rose just 2.4% in January after an 8.3% decline the previous month, indicating that a series of rate cuts by the country’s central bank at the end of last year have not significantly boosted the economic overall outlook.
The euro was higher against the Canadian dollar, with EUR/CAD adding 0.42% to hit 1.2984.
Later in the day, Greece’s government was due to resume talks with its bond holders to discuss a voluntary write-down on Greece’s sovereign debt, after talks broke down on Friday, amid disagreements over how much money investors will lose by swapping their bonds.
Meanwhile, the U.S. was to release official data on producer price inflation and industrial production.
During European late morning trade, the euro was sharply higher against the U.S. dollar, with EUR/USD advancing 0.71% to hit 1.2836.
The euro’s gains came amid media reports that the IMF wants to reach an agreement on enlarging its lending capacity to USD1 trillion, from the existing USD385 billion at a meeting of the Group of 20 nations due to take place at the end of February.
The euro faltered earlier after Fitch’s warned that Italy could face a two-notch downgrade.
The comments came after the ratings agency, which currently holds Italy at an A+ rating, said last week that there was a “significant” chance that Italy would be downgraded by the end of January.
The euro was also higher against the pound, with EUR/GBP climbing 0.49% to hit 0.8346.
In the U.K., official data showed that the unemployment rate unexpectedly rose to a 17-year high of 8.4% in December, from 8.3% the previous month.
The report also showed that the claimant count rose by a seasonally adjusted 1,200 in December, significantly below expectations for an increase of 8,000, indicating that the downturn in the labor market may be moderating.
The single currency was also higher against the safe haven yen, with EUR/JPY adding 0.61% to hit 98.45, after falling to 97.04 on Monday, the pair’s lowest level since December 2000.
Japanese Finance Minister Jun Azumi warned against the appreciation of the yen earlier, signaling his readiness to curb the currency’s gains, although he said Japan could not intervene in the same way Switzerland has.
Elsewhere, the euro was steady against the Swiss franc, with EUR/CHF dipping 0.01% to hit 1.2091.
A report earlier showed that the ZEW index of Swiss economic expectations rebounded to minus 50.1 this month, from minus 72.0 in December, the strongest increase since April 2011.
But the euro continued to struggle close to record lows against the Australian and New Zealand dollars, which found support on speculation that China is set to ease monetary policy, with EUR/AUD rising 0.26% to hit 1.2307 and EUR/NZD dipping 0.07% to hit 1.5900.
In Australia, report showed that consumer sentiment rose just 2.4% in January after an 8.3% decline the previous month, indicating that a series of rate cuts by the country’s central bank at the end of last year have not significantly boosted the economic overall outlook.
The euro was higher against the Canadian dollar, with EUR/CAD adding 0.42% to hit 1.2984.
Later in the day, Greece’s government was due to resume talks with its bond holders to discuss a voluntary write-down on Greece’s sovereign debt, after talks broke down on Friday, amid disagreements over how much money investors will lose by swapping their bonds.
Meanwhile, the U.S. was to release official data on producer price inflation and industrial production.