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The euro rose against the dollar, reaching the strongest level in almost two months, as a report showed business confidence in Germany surpassed analysts’ forecasts and rose to a record high in January.
The common currency gained versus 15 of its 16 most-active counterparts amid optimism that European policy makers will find a long-term solution to deal with the sovereign-debt crisis. Goldman Sachs Group Inc. said the European Union will prevent any potential “liquidity constraint’” in Spain from turning into a region-wide financial crisis.
The Ifo institute’s business climate index, based on a survey of 7,000 executives, was 110.3 in January, up from the 109.9 median forecast. That’s the highest since records for a reunified Germany began in 1991.
Further gains in the euro may be limited as Fitch Ratings warned there’s a continuing risk that euro-region nations will have their credit ratings downgraded.
The Australian and New Zealand dollars dropped as a decline in Asian stocks sapped demand for higher-yielding currencies.
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