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At first half of yesterday the euro strengthened from a seven-week low against the dollar as German reports showed business confidence improved and economic growth accelerated even with Europe’s worsening debt crisis. The Munich-based Ifo institute said its business climate index increased to 106.6 this month from 106.4 in October. The euro also advanced versus the pound amid signs Germany is softening its opposition to allowing issuance of common euro-area bonds. Yesterday Germany received insufficient bids at a bond auction, fueling concern that Europe’s sovereign-debt crisis is driving away investors from the region’s assets. German newspaper editorials and opposition politicians stepped up bids for Chancellor Angela Merkel to shift from an incremental approach after the government sold 35 percent less bonds than its maximum target at yesterday’s auction. Bild newspaper reported Merkel’s coalition is concerned it may have to agree to euro bonds under certain conditions.
But euro fell later. At second half of yesterday Fitch lowers Portugal's growth fcst due European outlook. Sees Portugal 2012 GDP falling 3%. Cites Portugal high debt,large fiscal imbalances. Portugal could be further downgraded if growth disappoints.
EUR/USD: yesterday the pair showed a new week’s low, but restored later.
GBP/USD: yesterday the pair fell.
USD/JPY: yesterday the pair weakened.
On Friday the output of significant macroeconomic statistics is not planned.
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