The euro traded at almost a seven-week high against the dollar after a report showed Germany’s factory orders rebounded in June more than economists forecast, adding to signs the region is recovering.
The 17-nation currency rose versus most of its 16 major counterparts after separate data showed Italy’s recession eased in the second quarter. The yen touched an almost six-week high versus the greenback. The Australian dollar gained for a second day against the U.S. currency after the central bank damped expectations of further interest-rate cuts after reducing its benchmark to a record low.
“Stronger-than-expected German factory orders have been encouraging and support the view that, economically, the European outlook is finally beginning to turn,” Camilla Sutton, head of currency strategy at Bank of Nova Scotia, wrote in a note to clients.
The euro gained 0.4% to $1.3305 at 3:09 p.m. New York time after rising to $1.3345 on July 31, the highest level since June 19. The common currency fell 0.3% to 129.97 yen. Japan’s currency rose 0.6% to 97.69 yen per dollar after reaching 97.51, the strongest since June 26.
The South African rand fell versus all 16 of its major peers as an expansion in U.S. service industries in July supported speculation that the Federal Reserve is poised to reduce monetary stimulus. The currency decreased 0.9% to 9.9335 per dollar after earlier rising 0.3%.
Poland’s zloty rose against most of its 31 most-traded counterparts after the increase in German factory orders. The zloty appreciated 0.5% to 3.1605 per dollar after touching 3.1568, its strongest level since June 14.
The British pound weakened for the first time in four days against the euro before Bank of England Governor Mark Carney presents a review tomorrow for implementing forward guidance in the U.K. Sterling depreciated 0.4% to 86.65 pence per euro.
The euro has strengthened 5.8% this year, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar rose 4.8%, while the yen slumped 8.2%.
A measure of price fluctuations among Group of Seven currencies fell for a fourth day. JPMorgan Chase & Co.’s G-7 Volatility Index declined to 9.42%, the lowest intraday level in almost two weeks.