Euro rises in longest streak in 1 year on outlook

The euro advanced for a sixth day against the dollar (FOREX:EURUSD), the longest streak in almost a year, as regional finance ministers met in an attempt to break a deadlock about a single resolution mechanism for failed European banks.

The common currency reached the strongest level in almost six weeks against the greenback as reports showed Italy’s industrial production expanded and the economy stopped shrinking, boosting optimism the region is recovering. The euro has gained more than 1% versus the dollar since the day before the European Central Bank refrained from introducing a negative deposit rate at a meeting last week. Sweden’s krona fell to an 18-month low versus the euro after industrial production in the nation fell.

“The eco-fin meeting is focusing on a single resolution mechanism for banks,” Sireen Harajli, a strategist at Mizuho Bank in New York, said in a phone interview. “There’s some hope they might be able to reach some deal by the end of the year, which could have helped gains in the euro.”

The euro rose 0.2% to $1.3765 at 9:03 a.m. in New York after rising to $1.3768, the strongest since Oct. 30. The six straight increases were the most since the seven days ending Dec. 18, 2012. The common currency fell 0.2% to 141.54 yen after climbing to 142.17, the highest since October 2008. The dollar fell 0.5% to 102.80 yen.

Rand Rally

South Africa’s rand strengthened versus all 16 of its major peers after reports showed manufacturing production unexpectedly expanded 1.5% in October from a year earlier, compared with a 2% contraction predicted by 17 economists in a Bloomberg survey and a 3.3% decline the previous month. The currency gained 0.7% to 10.3214 per dollar after touching 10.2722, the highest in a week.

The krona fell for a fourth day versus the euro as Statistics Sweden said industrial production slid 1.7% in October from the previous month. The median estimate of economists surveyed by Bloomberg was for a gain of 0.9%.

The Swedish currency declined 0.2% to 8.9924 per euro.

ECB President Mario Draghi said at a press conference last week while the ECB was “technically ready” to cut its deposit rate below zero, the Governing Council only discussed a negative rate “briefly” at its meeting.

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