Euro Touches Month-High as Spain Keeps Investment Grade

Euro Touches Month-High as Spain Keeps Investment Grade

The euro strengthened to a one-month high against the dollar after Spain kept its investment-grade credit rating from Moody’s Investors Service before European leaders gather tomorrow for a two-day summit in Brussels.
The yen fell to its lowest level against the dollar in almost a month after a Nikkei report said the Bank of Japan (8301) will face pressure to boost monetary stimulus at its next meeting ending Oct. 30. The dollar weakened versus all of its major peers as U.S. housing starts rose to a four-year high last month, damping demand for safer assets. The 17-nation euro appreciated for a fifth day versus the yen as Spanish and Italian bonds rallied.
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“What helped spark this latest move is the fact that Moody’s didn’t cut Spain below investment grade,” Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York, said in a telephone interview. “The big risk-on move today took place because of Spain.”
The euro gained 0.5 percent to $1.3119 at 5 p.m. New York time, after reaching $1.3140, the highest level since Sept. 17. The common currency advanced 0.6 percent to 103.56 yen. The yen declined 0.1 percent to 78.93 per U.S. dollar, after strengthening as much as 0.3 percent.
The shared currency may appreciate to its highest level in nearly eight months after breaking out above $1.3074, Cilline Bain, a London-based technical analyst at Credit Suisse Group AG, wrote today in a client note. If the euro can exceed the $1.3172-to-$1.3178 resistance zone, it could rise to $1.3388, the highest point since Feb. 29, Bain wrote. Resistance refers to an area on a chart where sell orders may be gathered.