The euro touched its strongest level in two weeks versus the dollar after German business confidence unexpectedly increased to a nine-month high, fueling investor appetite for risk.
The 17-nation currency strengthened versus the yen as governments committed more than $430 billion in fresh money to the International Monetary Fund to help it protect the world economy against Europe’s deepening debt crisis. The pound gained for a fifth day against the dollar after U.K. retail sales climbed. Brazil’s real rose for the first time in six days as technical indicators showed it may have fallen too quickly.
“This is a broader sentiment recovery, and the euro is being driven by better-than-expected Ifo readings,” said Ned Rumpeltin, head of Group of 10 currency strategy at Standard Chartered Plc in London, referring to the German confidence gauge. “U.K. retail sales were also quite constructive.”
According to Bloomberg, the euro gained 0.6 percent to $1.3219, for a 1.1 percent weekly advance, the first since March 30. It touched $1.3228, the highest level since April 4. The shared currency rose 0.5 percent to 107.79 yen, appreciating 1.9 percent on the week. The yen was 0.1 percent stronger at 81.52 per dollar, paring its weekly drop to 0.7 percent.
The Munich-based Ifo institute said today its business climate index, based on a survey of 7,000 executives, rose to 109.9 this month from 109.8 in March. Economists in a Bloomberg survey forecast a drop to 109.5.
The near-doubling of the IMF’s firepower was announced after Group of 20 finance ministers and central bankers met today in Washington. While the U.K. and Australia were among those making specific pledges, Brazil said emerging markets would condition their help on getting more power at the fund.
The Dollar Index (DXY), which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six major U.S. trade partners, fell 0.5 percent to 79.144 as U.S. stocks snapped a two-day decline amid better-than-estimated earnings reports from Microsoft Corp. and General Electric Co. The Dow Jones Industrial Average advanced 0.5 percent.