“The euro strengthened to a one-month high against the dollar after Spain kept its investment grade credit rating from Moody’s Investors Service, spurring a rally in Spanish and Italian bonds.
The 17-nation currency appreciated for a fifth day versus the yen amid speculation European Union leaders meeting in Brussels tomorrow will reach an agreement on providing more help forGreece. The dollar weakened before a U.S. report that economists said will show house building climbed last month, damping demand for safer assets. The pound rose against the greenback after U.K. jobless claims unexpectedly declined.
“It’s about potential relief with regard to Spain” and optimism that Greece will receive additional bailout payments, said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. (BK) in London. “Those two factors are the key to understanding why the euro is going higher.”
The euro gained 0.5 percent to $1.3116 at 7:01 a.m. New York time after rising to $1.3129, the highest level since Sept. 17. The common currency advanced 0.2 percent to 103.22 yen, extending its rally over the past week to 2.5 percent. The dollar declined 0.3 percent to 78.70 yen.
Moody’s said yesterday it kept Spain’s credit rating at Baa3, one step above junk, as the risk that the nation would lose market access had fallen because of the European Central Bank’s willingness to purchase its bonds.”
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