Euro Up After Lagarde Urges Greater Global Cooperation For Recovery

Euro Up After Lagarde Urges Greater Global Cooperation For Recovery

The euro advanced against other major currencies in the early European session on Friday after IMF Managing Director Christine Lagarde called for less austerity and greater global economic cooperation as key drive for a strong path to recovery.

While speaking at the plenary session of the IMF-World Bank 2012 Annual Meetings in Tokyo, Lagarde said top priority was for the world to get beyond the current crisis and to restore sufficient growth to generate jobs for the millions of unemployed.

"In bringing an end to the crisis, the first priority would be to restore growth. Without growth, the future of the global economy is in jeopardy. Restoring growth would be essential to address the huge legacy of public debt-now averaging almost 110 percent of GDP for the advanced economies," she added.

Lagarde on Thursday said that Greece may need two more years to reach the fiscal consolidation targets.

"This is what we advocated for Portugal, this is what we advocated for Spain, and this is what we are advocating for Greece, where I said repeatedly that an additional two years was necessary for the country to actually face the fiscal consolidation program that is considered," Lagarde has said Thursday at Tokyo.

Eurozone industrial production grew unexpectedly by 0.6 percent month-on-month in August, the same rate of expansion as seen in July, estimates released by Eurostat showed. Production was forecast to fall by 0.4 percent.

Meanwhile, industrial production dropped 2.9 percent on a yearly basis, following a 2.8 percent fall in July. Economists had forecast a 4.1 percent decrease for August.

Italy's EU harmonized inflation increased in September, and matched initial estimates, final data released by statistical office Istat showed today.

The harmonized index of consumer prices (HICP) increased 3.4 percent on an annual basis in September, in line with the preliminary estimates. In August, the rate of growth was 3.3 percent.

The euro climbed to 1.2986 against the U.S. dollar and 0.8088 against the pound, its highest levels since October 9. On the upside, the euro is likely to find next target level at 1.30 against the greenback and 0.81 against the pound.

House prices in the United Kingdom decreased for the third successive month in September, signaling a further slowdown in the mortgage market, data from a survey by Acadametrics and LSL Property Services showed today.

The house price index dropped 0.1 percent on a monthly basis in September, after falling 0.2 percent each in the previous two months

Against the yen, the euro reversed direction and hit a 4-day high of 101.93. The euro-yen pair is likely to test next resistance level at 102.5.

An index measuring tertiary industry activity in Japan was up a seasonally adjusted 0.4 percent on month in August, the Ministry of Economy, Trade and Industry said, standing at 99.1.

That matched forecasts following the 0.8 percent contraction in July.

A separate report showed that an index measuring the prices of domestic corporate goods was up 0.3 percent on month in September, standing at 100.5.

That beat forecasts for an increase of 0.2 percent, which matched the August reading following a downward revision

The euro firmed modestly to 1.2103 against the franc, compared to yesterday's American session close of 1.2089. If the euro rises further, it may break 1.22 level.

The European single currency also outperformed against the Canadian and Australian dollars, hitting multi-day highs of 1.2702 and 1.2638, respectively. The euro may break next upside target level at 1.28 against the loonie and 1.27 against the aussie.

From the U.S., PPI for September and preliminary report of Reuters/University of Michigan's consumer sentiment index for October are slated for release in the New York morning session.