Euro climbs against dollar
LONDON: The euro on Friday climbed against the dollar following more strong eurozone economic data but fell versus sterling on evidence that Britain may soon be exiting recession, traders said.
Approaching midday trade in London, the European single currency rose to 1.4358 dollars from 1.4345 dollars in New York late on Thursday.
The dollar gained to 94.03 yen from 93.45 yen late Thursday.
European business and consumer confidence firmed in August for a fifth month running, an EU survey showed on Friday, adding to a recent string of encouraging news for Europe's struggling economies.
The European Commission's economic sentiment indicator for the 16 nations using the euro single currency rose to 80.6 points from 76 points in July, continuing a gradual climb away from a record low 64.6 points in March.
Official data also showed that Britain's recession-hit economy contracted by a better-than-expected 0.7 percent in the second quarter of 2009 compared with the first three months of the year, lifting the British pound.
"Crucially the pound has popped its head back over the 1.1363 euro level which is important and sterling has gained against the yen and the dollar," said analyst Phil McHugh at currenciesdirect.com.
Elsewhere on Friday, the yen fell against the euro and dollar as concerns deepened about the sustainability of Japan's economic recovery after the jobless rate hit a record high, traders said.
"Moderate selling of the yen emerged after the release of weak indicators, including the jobless rate," said Akira Takeuchi, a dealer at Chuo Mitsui Trust Bank.
Japan's unemployment rate rose to a record high of 5.7 percent in July, while core consumer prices dropped 2.2 percent in the month from a year earlier, the fastest pace on record, official data showed.
"Market participants continued to pay close attention to shares in Shanghai, which are now regarded as a prime factor for trade in both equity and foreign exchange markets," Takeuchi said.
Chinese shares closed down 2.91 percent on Friday as recent equity fund-raising announcements from large companies raised concerns over a share supply glut, dealers said.
The market was looking ahead to Japan's weekend elections in which Prime Minister Taro Aso's ruling coalition looks likely to suffer a major defeat against the opposition Democratic Party of Japan (DPJ), dealers said.
"Non-Japanese players will likely take a DPJ victory as positive because they expect the party to become a strong force for change," Koji Takeuchi, a senior economist at Mizuho Research Institute, told Dow Jones Newswires.
In London on Friday, the euro was changing hands at 1.4358 dollars against 1.4345 dollars late on Thursday, at 134.89 yen (134.06), 0.8794 pounds (0.8817) and 1.5194 Swiss francs (1.5189).
The dollar stood at 94.03 yen (93.45) and 1.0593 Swiss francs (1.0585).
The pound was at 1.6312 dollars (1.6268).
On the London Bullion Market, the price of gold climbed to 951.33 dollars an ounce from 943 dollars an ounce late on Thursday.