The euro registered strong gains against the currencies of U.S. and Japan in early European deals on Monday on the back of a rise in most Asian and European stocks. The euro thus rose to an 11-day high against the U.S. dollar and a 10-day high against the yen.
Meanwhile, the euro recovered recent losses against the franc, but it weakened against the pound.
At 5:33 am ET, U.K’s FTSE 100 index was up by 40 points or 0.77%, Germany’s DAX gained 75 points or 1.24% and France’s CAC 40 garnered 50 points or 1.5%.
An upbeat euro-zone industrial production report released in the session also supported the euro.
The eurozone’s industrial production grew by 0.8% month-on-month in April from a 1.3% growth over previous month and also beating expectations of 0.5% growth. This brings annual industrial production to 9.5% above prior year’s April and in excess of analysts expectations of 8.7% growth.
The euro, which showed choppy trading against the U.S. dollar during late Asian session, gained momentum after 4:35 am ET. Presently, the euro-dollar pair is trading at an 11-day high of 1.2227, an appreciation of 1.03%, over last week’s close of 1.2100. If the euro gains further, it may target around the 1.233 level.
Moving away from late Asian session’s choppy trend, the euro rose to a 10-day high of 112.67 versus the yen at 5:35 am ET. The euro-yen pair, which closed Friday’s trading at 110.96, is now worth 112.33. On the upside, the euro may target around the 114.0 level.
Japan’s BSI large manufacturing survey index for the second quarter and the final industrial production report for April, which were released today likely influenced the yen.
The Bank of Japan began its two-day monetary policy meeting today and will conclude on Tuesday, with analysts expecting the bank to keep rates on hold at the record low of 0.10 percent.
It also marks the first policy meeting with former Finance Minister Naoto Kan as Prime Minister. Kan has been very vocal in calling for further measures to combat deflation.
The euro continued its downtrend versus the pound during Monday’s early European deals. At present, the euro is trading at 0.8309 against the pound, compared to an early Asian session’s 11-day high of 0.8362. On the downside, the euro may target around the 0.821 level. The euro-pound pair was worth 0.8327 at last week’s New York session close.
Against the Swiss franc, the euro exhibited choppy trading during late Asian session on Monday, after hitting a 10-day high of 1.3966 in early deals at 8:00 pm ET. Although the euro fell in early European session, it bounced back after hitting a low of 1.3876 at 4:30 am ET. Currently, the euro is trading near last week’s close of 1.3914 against the franc. If the euro gains further, it may target an early Asian session’s 10-day high of 1.3966.
From Switzerland, a report showed today that the nation’s producer and import prices jumped 1.4% in May, following a 0.8% rise in April. Economists were looking for an increase of just 0.9%.
On a monthly basis, the producer and import price index climbed 0.3% in May – beating expectations of a 0.1% fall.
There are no economic reports due for release from the US in today’s North American session.