The yen lost the most against the euro since February amid speculation the Bank of Japan would add further stimulus even as global growth accelerates.
Sterling had its biggest weekly gain versus the US dollar in 15 months on bets the Bank of England might refrain from further monetary easing. The US dollar fell against most major peers before the US Federal Reserve begins a two-day policy meeting on Tuesday. The euro rose amid stronger-than-forecast German data.
“We are expecting the Bank of Japan to take action next week, and further movements in the yen will depend how aggressive they are,” said Eric Viloria, senior currency strategist at Gain Capital Group LLC in New York. “It’s not going to have the same impact it did when they announced the inflation target and expanded stimulus by ￥10 trillion [US$123 billion]. Every time a bank takes action you see a diminishing impact on the currency.”
The yen slid 1.9 percent to ￥107.79 per euro on Friday in New York in the biggest weekly loss since the five days ended Feb. 24. It fell 0.7 percent versus the US dollar, the most in a week since March 16, to ￥81.52.
Europe’s shared currency strengthened 1.1 percent to US$1.3219, from US$1.3078 on Friday last week, in its biggest jump in almost two months. The euro rallied this week after falling below US$1.30 on Monday for the first time since February as Spanish borrowing costs rose to their peak this year, fueling concern Europe’s sovereign-debt crisis was spreading.
The euro gained after the Bundesbank said on Tuesday the German economy, Europe’s largest, was in “remarkably good shape” and the ZEW Center for European Economic Research’s index of investor and analyst expectations rose to the highest since June 2010.
The Munich-based Ifo institute’s gauge of German business confidence unexpectedly increased to 109.9 this month from 109.8 last month, data showed on Friday.
The 17-nation currency broke above its 50-day moving average against the US dollar on Friday, touching its strongest level in two weeks, US$1.3228, even as Spain’s 10-year yields reached above 6 percent. The debt touched 6.16 percent four days earlier, the highest since December.
The pound climbed 1.7 percent, the most since January last year, to US$1.6122. It gained 0.7 percent to ￡0.8197 per euro.