Sept. 7 (Bloomberg) -- The euro rose against the dollar for a second day before a report forecast to show European investor confidence rose to the highest level since July 2008, signaling the region’s recession is easing.
The euro also gained for a third day versus the yen on speculation a German report will show factory orders expanded in July for a fifth month. Australia’s dollar rose to the highest level in a year against the greenback after the Group of 20 nations pledged to maintain economic stimulus, driving up Asian and European stocks. Treasury futures were unchanged on the U.S. Labor Day holiday.
“Confidence seems to be building up, and euro-dollar is up a bit,” said Paul Bednarczyk, a currency strategist in London at 4Cast Ltd., a research company that counts central banks among its subscribers. “There’s a little bit more risk appetite around.”
The euro strengthened to $1.4347 as of 9:08 a.m. in London, from $1.4297 in New York on Sept. 4. Europe’s currency rose to 133.76 yen, from 132.98 yen, and climbed to 87.38 British pence, from 87.22 pence. The dollar traded at 93.25 yen, from 93.01 yen. The euro will probably stay between $1.42 and $1.44 for the rest of the week, Bednarczyk said.
Australia’s dollar climbed to 85.47 U.S. cents, from 85.07, after earlier rising to 85.55 U.S. cents, the strongest level since September 2008. Australia’s currency advanced to 79.68 yen, from 79.11 yen.
The yen weakened versus all 16 of its major counterparts as the Nikkei 225 Stock Average climbed 1.3 percent. Europe’s Dow Jones Stoxx 600 Index advanced 1.4 percent.
Labor Day Holiday
Ten-year U.S. bond futures maturing in December 2009 were unchanged at 117-01 as the Treasury prepared to sell $70 billion in three-, 10- and 30-year debt this week, according to data compiled by Bloomberg.
The euro snapped three days of losses versus the pound as a Bloomberg News survey of economists showed an index measuring euro-region sentiment will rise to minus 13.7 this month from minus 17 in August. The Limburg, Germany-based Sentix research institute is set to report the index at 10:30 a.m. local time.
Germany’s Economy Ministry in Berlin will say today factory orders gained 2 percent in July after rising 4.5 percent in June, according to a separate Bloomberg survey of economists.
G-20 officials including U.K. Chancellor of the Exchequer Alistair Darling and German Finance Minister Peer Steinbrueck said in London last week that it was premature to quit emergency measures to fight the global recession, signaling central banks will hold down interest rates.
‘Improved Outlook’
“With an improved outlook for growth and no early unwinding of stimulative policies, this should support investor risk appetite and hence global growth-sensitive currencies such as the Australian dollar,” John Kyriakopoulos, head of currency strategy in Sydney at National Australia Bank Ltd., wrote in a research note today.
U.S. companies cut payrolls by 216,000 workers in August, fewer than economists had forecast and following a 276,000 reduction in July, Labor Department data showed on Sept. 4. The jobless rate rose to 9.7 percent from 9.4 percent.
“There’s a sense the worst of the worldwide recession is over, with the equity market rebounding,” said Akifumi Uchida, deputy general manager of the marketing unit at Sumitomo Trust & Banking Corp. in Tokyo. “From a risk-appetite perspective, the yen is likely to be sold.”
The benchmark interest rate is 0.1 percent in Japan, compared with 3 percent in Australia, making the South Pacific nation’s assets attractive to investors.
Losses in the yen may be limited today due to trading patterns during the Labor Day holiday, said Tohru Sasaki, chief currency strategist in Tokyo at JPMorgan Chase & Co., citing charts prepared by the bank.
“While we are tempted to say that the market is likely to be range-bound because today is a U.S. holiday, the yen actually has a strong tendency to appreciate on the U.S. Labor Day holiday,” Sasaki wrote in an e-mail to Bloomberg News today.
The yen has appreciated eight out of nine times since 2000 on Labor Day, Sasaki said.
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