Tuesday, 18 Jan 2011

EUR Up, but Shaky from Regional Uncertainty

The euro rose against the dollar on Tuesday on buying by sovereign funds and strong German economic data but doubts Europe can boost a rescue fund to head off debt problems may prevent further gains.

After surging more than 1 percent, the euro pared gains against the dollar and traded at the New York session low, the single currency pressured by lack of progress at the two-day European debt summit.

The euro nevertheless has outperformed the dollar in six of the past seven sessions, contributing to upbeat outlooks for the currency shared by 17 nations.

The euro had earlier gained more than 1 percent against the dollar after Germany, Europe's largest economy, showed its ZEW headline economic sentiment indicator surged to its highest reading in six months, jumping to 15.4 points in January from 4.3 points in December and racing past forecasts for a reading of 6.8.