Euro Extends Rally against the Dollar as German Unemployment Rate Falls

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Euro Extends Rally against the Dollar as German Unemployment Rate FallsThe euro extended its gains against the dollar for the third straight day after a report on German’s unemployment rate released today indicated that the number of jobless people declined more than expected.

The 18-nation currency surged to a two-week peak against the yen after gauge of Spanish factory activity rose, lowering bets that the European Central Bank will roll out more stimulus. The Swedish krona rose for the second day after the country’s manufacturing activity rose.

The euro was up 0.2 percent to $1.3795 as of 8.28 a.m. in New York trading, after advancing 0.2 percent over the past two days. It also rallied 0.3 percent against the yen to 142.56, after earlier reaching 142.68 yen, its highest level since March 13. The dollar rose 0.1 percent to stand at 103.34 yen.

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“We don’t feel the ECB will be forced to do more right now,” said Roberto Mialich, a Milan-based senior currency strategist at UniCredit Bank. “We will continue to see a stronger euro in the medium term.”

The Bloomberg Dollar Spot Index, which measures the dollar’s moves against 10 major peers, remained slightly unchanged at 1,015.86.

The New Zealand kiwi advanced 5.5 percent versus the dollar in the first quarter, the biggest gain of dollar’s 16 major counterparts.

The South African rand fell 0.6 percent to 10.5915 a dollar after industrial activity declined more in March than economists had estimated. A gauge of manufacturing output decreased from 51.7 to 50.3 in February, lagging analysts’ estimate of 51.2 in a Bloomberg poll.

The South Korean won rose 0.6 percent to a six-week high of 1,058.70 per dollar as exports rose. The krona surged against 16 major peers after Swedbank announced that its index of Swedish manufacturing output rose to an annualized adjusted 56.5 in March, up from 54.6 the previous month. The currency rose 0.3 percent to 6.4540 per dollar, and inched 0.1 percent higher against the dollar.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com