Investing.com - The euro rallied to a one-month high against the yen on Tuesday, as demand for the single currency was bolstered by speculation over a ‘soft’ bailout for Spain, while upbeat German economic sentiment data also lent support.
EUR/JPY hit 103.07 during U.S. morning trade, the pair’s highest since September 19; the pair subsequently consolidated at 102.70, jumping 0.88%.
The pair was likely to find support at 101.79, the session low and resistance at 103.25, the high of September 18.
The euro strengthened broadly after two senior German lawmakers indicated that they would support a Spanish application for a ‘precautionary credit line’ from the European Stability Mechanism, the euro zones permanent bailout fund.
On Monday, Spanish government officials said they were exploring the option of requesting a credit line from the ESM, in order to satisfy the terms of the European Central Bank’s bond buying program, but then not using it, instead waiting for borrowing costs to fall.
Earlier Tuesday, the ZEW Centre said that its closely watched index of German economic sentiment improved to minus 11.5 in October from September’s reading of minus 18.2. Economists had forecast a reading of minus 15.0 this month.
Separately, official data showed that consumer price inflation in the euro zone slowed to 2.6% in September, down from a preliminary estimate of 2.7%.
In the U.S., the Labor Department said consumer prices rose by 0.6% in September, above expectations for a 0.5% gain on the back of higher gasoline prices.
Consumer prices rose at an annualized rate of 2.0% last month, compared to expectations for a 1.9% increase and up from 1.7% in August.
The euro advanced to a more than one-week high against the U.S dollar, with EUR/USD up 0.66% to 1.3033 and was close to a one-month high against the pound, with EUR/GBP rising 0.38% to 0.8088.
Also Tuesday, official data showed that industrial production in the U.S. rose 0.4% in September, above expectations for a 0.2% increase, after dropping by an upwardly revised 1.4% in August.
EUR/JPY hit 103.07 during U.S. morning trade, the pair’s highest since September 19; the pair subsequently consolidated at 102.70, jumping 0.88%.
The pair was likely to find support at 101.79, the session low and resistance at 103.25, the high of September 18.
The euro strengthened broadly after two senior German lawmakers indicated that they would support a Spanish application for a ‘precautionary credit line’ from the European Stability Mechanism, the euro zones permanent bailout fund.
On Monday, Spanish government officials said they were exploring the option of requesting a credit line from the ESM, in order to satisfy the terms of the European Central Bank’s bond buying program, but then not using it, instead waiting for borrowing costs to fall.
Earlier Tuesday, the ZEW Centre said that its closely watched index of German economic sentiment improved to minus 11.5 in October from September’s reading of minus 18.2. Economists had forecast a reading of minus 15.0 this month.
Separately, official data showed that consumer price inflation in the euro zone slowed to 2.6% in September, down from a preliminary estimate of 2.7%.
In the U.S., the Labor Department said consumer prices rose by 0.6% in September, above expectations for a 0.5% gain on the back of higher gasoline prices.
Consumer prices rose at an annualized rate of 2.0% last month, compared to expectations for a 1.9% increase and up from 1.7% in August.
The euro advanced to a more than one-week high against the U.S dollar, with EUR/USD up 0.66% to 1.3033 and was close to a one-month high against the pound, with EUR/GBP rising 0.38% to 0.8088.
Also Tuesday, official data showed that industrial production in the U.S. rose 0.4% in September, above expectations for a 0.2% increase, after dropping by an upwardly revised 1.4% in August.