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The euro strengthened to a two-week high against the dollar and the yen as Spain raised more than its maximum target at a debt sale, boosting optimism the region’s sovereign-debt crisis is being contained. Spain sold 6.61 billion euros ($8.5 billion) of debt due in 2016, 2019 and 2022, exceeding the maximum target of 4.5 billion euros set for the auctions. Investors bid for 3.2 times the amount of 2016 notes allotted, versus 1.7 times last week. Demand for the 2022 bond was 2.2 times the amount sold, from 1.5 in November. French borrowing costs declined as the nation sold 7.97 billion euros of medium and long-term securities.
The Dollar Index declined for a third day after U.S. inflation was little changed in December, giving the Federal Reserve more room to keep interest rates at virtually zero. The dollar weakened against most of its major peers as the outlook for interest rates spurred investors to seek higher- yielding assets. The central bank’s rate-setting committee meets Jan. 24-25. It has said it will keep the benchmark rate at a record low through at least mid-2013. The U.S. consumer price index was little changed for a second month, Labor Department data showed today in Washington.
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