The euro rose against the dollar Tuesday, hovering around $ 1.31, helped by a reassuring bond issue in Spain, and the announcement of finance ministers of euro loan to the International Monetary Fund (IMF), but caution was in order.
By 1700 GMT, the euro bought 1.3067 dollars against 1.2996 dollars around 2200 GMT Monday.
The single European currency also gained ground against the Japanese currency to 101.64 yen against 101.41 yen late Monday. Japan announced Tuesday its intention to boost its capacity for intervention in the foreign exchange market to reduce its currency. The dollar retreated against the yen at 77.78 yen against 78.02 yen Monday.
“A strong Spanish program was used to trigger a rebound” of the euro during the European exchanges, noted Elsa Lignos, an analyst at Royal Bank of Canada. The Spanish Treasury Tuesday raised 5.640 billion euros in vouchers at 3 and 6 months for its last bond issue of the year, at rates down sharply and beyond for the third straight time the government’s objective, with some relaxation on the market.
Another source of support for the single currency, the business climate in Germany has a new improved in December, companies are showing very optimistic for the first half of 2012 despite the worrying signs are multiplying that the European economy, according to results of the Ifo barometer published Tuesday.
The European currency was also helped by the announcement Monday of the countries in the euro area that they would provide 150 billion to the IMF in the form of bilateral loans to replenish its coffers, after a telephone conference of ministers Finance of the European Union (EU).
The announcement “shows that the progress has been made to strengthen the safety net of the monetary union and thus helped restore some morale (to traders), but (the loan) will not be enough to help the Spain and Italy, “if these two countries were to be in difficulty to borrow in the markets, commented Kathleen Brooks, an analyst with Forex.com.
Some analysts remained cautious, while the euro was struggling to go up lasting more than 1.31 euro.
