Euro soars in New York

The euro rose against the dollar and the yen on Thursday as lower Italian bond yields and Chinese lending data buoyed investor optimism even as the still-unresolved eurozone debt crisis clouded long-term views. Italian debt rallied for a second day after a sale produced mixed results, with some investors having anticipated a weaker auction.
"The fact the yields have come lower is a very important reflection overall," said Camilla Sutton, chief currency strategist at Scotia Capital. While the auction results could have been better, if they had disappointed further investors would have demanded a higher return for Italian debt, she added. But Sutton cautioned that the eurozone still faces significant headwinds, particularly around growth.
The euro touched a one-week high against the greenback, tracking a second straight session of gains against both the dollar and the yen. The single currency also got a boost as data from the Asia-Pacific region encouraged hopes for global economic growth.
Chinese bank lending spiked in March, a sign of fresh traction in Beijing's bid to boost credit creation to support the cooling economy. China is the world's second-biggest economy and a major engine of global growth. In addition, Australian employment surged past expectations in March while the jobless rate stayed low.
"There's a small rethink in the market that maybe Asia-Pacific is not as bad as the market thought, that the slowdown there is very temperate," said Boris Schlossberg, director of currency research at GFT Forex in Jersey City. The euro rose to a one-week high of $1.3212 against the dollar, bumping up against the 14-day simple moving average, according to Reuters data. The single currency more recently traded at $1.3188, up 0.60 percent on the day.
Traders said it extended gains after stop-loss buy orders were triggered on the break of $1.3155-60, forcing players to cut short positions in the common currency. Uncertainty about the euro has fallen as reflected in the options market, with three-month risk reversals in the euro/dollar still biased for euro puts, trading at -2.15 vols on Thursday, improving from -3.5 vols in mid-February. The single currency also gained against the yen, last trading at 106.57 yen, up 0.52 percent. The dollar last traded down 0.06 percent against the yen at 80.81 yen, retreating from a high of 81.13 reached in the overnight session.