Euro gains in New York

The euro rose from a seven-week low on Monday on hopes of progress on the sovereign debt crisis but gains could prove fleeting if crucial upcoming events cast doubt on the likelihood of decisive action. Hefty debt supply this week from Italy and Spain, a eurozone finance ministers meeting starting on Tuesday.
A European Central Bank announcement on December 8 and a European Union summit on December 9 should prove pivotal for the euro and risk-correlated currencies. Earlier reports about IMF funding for Italy, denied by the IMF, initially encouraged investors to unwind bearish positions in the common currency. Euro momentum, however, was mostly sustained on news of German and French plans to fast-track new rules to tighten eurozone budgetary discipline.
Officials said Germany and France were exploring radical methods of securing deeper and more rapid fiscal integration among eurozone countries. Germany will propose that eurozone countries set up national funds to house debt exceeding the EU's limit of 60 percent of gross domestic product as part of a drive to restore confidence in Europe's finances, Finance Minister Wolfgang Schaeuble said.
The euro was last up 0.5 percent to $1.3304 after climbing to almost $1.3400. Steady selling had driven the currency down 7 percent from a high on October 27 to a trough on Friday. Nevertheless, euro negatives abound. In particular, the fiscal integration plans seem to be focusing on AAA-rated eurozone sovereigns, leaving Italy and Spain largely unaccounted for. Additionally, any push for EU treaty changes needed for the creation of broader fiscal union could face some strong opposition by various eurozone and EU countries.
Currency speculators raised their bets in favour of the US dollar to the highest in five weeks in the latest week, according to data from the Commodity Futures Trading Commission released on Monday. Commodity currencies outperformed the euro, with the Australian dollar up 1.9 percent to $0.9884. The New Zealand dollar was up more than 2 percent at $0.7545. Against the yen, the dollar rose 0.3 percent to 77.98 yen while it lost 0.9 percent against the Swiss franc to trade at 0.9224 francs.