The euro was trading near a six-week high versus the yen and was set to complete five-day gains against all major rival currencies, as Germany backed proposed measures by the European Central Bank (ECB) to resolve the sovereign debt crisis.
German Chancellor Angela Merkel said that the ECB’s insistence on conditionality in return for helping lower borrowing costs for indebted governments matches her priorities.
Merkel is scheduled to meet French President Francois Hollande on Aug. 23 and Greek Prime Minister Antonis Samaras a day later.
Italian media reported that Prime Minister Mario Monti is due in the German capital on Aug. 29, while Spanish Prime Minister Mariano Rajoy has said that Merkel will visit Madrid on Sept. 6.
The yen headed for its biggest weekly loss in almost two months versus the greenback, as the extra yield investors receive from US securities over Japanese debt climbed. Singapore’s dollar weakened as exports rose at a slower pace.
Crude oil futures in New York is up 2.3% this week amid growing optimism surrounding the health of the US economy. Data on US retail sales, industrial output and building permits for July beat economists’ expectations this week. Crude also gained as US stockpiles dropped and consumption hit a nine-month high.
Gold is set to gain for a third straight day, paring a weekly loss, on speculation that governments from China to US may take steps to boost growth.
Platinum rose to a five-week high after production disruptions at a mine in South Africa.
The euro traded at 97.93 yen as of 1:45 p.m. in Tokyo from 98.04 yesterday, when it touched 98.18, the most since July 6. It was at US$1.2343 after rising 0.5% to US$1.2356 in New York. Japan’s currency fetched 79.32 per dollar from 79.35.
The euro is set to gain 0.4% against the dollar this week. The yen headed for a 1.3% loss versus the greenback, its biggest drop since the week through June 22.
"Obviously time is pressing on stamping out the debt crisis, though on many of these issues we feel we are on the right track," Merkel told reporters in Ottawa yesterday at a joint press conference with Canadian Prime Minister Stephen Harper.
"Euro area policy makers feel committed to do everything we can to maintain the common currency," she said.
Recent ECB decisions have made it clear that the central bank was counting on political action in the form of conditionality as the precondition for a positive development of the euro," Merkel said.
She added that Germany is in line with the ECB’s approach to defending the euro.
The euro has lost 4.6% over the past three months, the worst performer alongside the Swiss franc among the 10 developed-market currencies. The yen declined 1.6% and the dollar slid 1.5%.
The MSCI Asia Pacific Index rose 0.4% today to 120.88 as of 1:30 p.m. in Tokyo. About five stocks climbing for every three that declined on index, which is poised for its longest run of weekly gains since early March.
The Asian benchmark closed at 120.93 on Aug. 9, the highest since May 8.