German confidence data gives boost to euro

NEW YORK: The euro picked up ground on the dollar and the yen Thursday as the Greek bailout appeared on track and German business confidence hit its highest level in seven months.

At 2200 GMT the euro reached $1.3369 from $1.3252 on Wednesday, and also traded to 106.94 yen from 106.41 yen.

The dollar meanwhile slipped against the yen, to 79.98 from 80.29, after climbing steadily from the 76.20 yen level at the beginning of the month.

Offsetting more gloomy forecasts of eurozone recession was news that German business confidence rose to a seven-month high in February, as robust domestic demand helped protect the German economy against the debt crisis.

The Ifo economic institute's closely watched business climate index beat analysts' expectations to rise for the fourth month in a row to 109.6 points in February from 108.3 points in January.

That helped propel the euro to its best level in two weeks, as measured confidence returns after EU officials set a second bailout for Greece that brought some stability back to markets.

But David Song of DailyFX said the greenback's weakness was likely momentary.

"As the more robust recovery in the world's largest economy curbs speculation for another large-scale asset purchase program, the bullish sentiment underlining the US dollar should continue to gather pace over the near-term as Fed officials soften their dovish tone for monetary policy."

The British pound edged up to $1.5741 from $1.5667. The dollar also slipped against the Swiss franc, to 0.9017 from 0.9101.

Copyright AFP (Agence France-Presse), 2012