The Euro exchange rate rallied against the U.S. Dollar after the ZEW Centre for Economic Research issued a report revealing that German investors were feeling optimistic about their economy. However, concerns over the upcoming Italian elections limited the Euro’s gains, especially as market investors believe the outcome of the elections may end in a hung Parliament.
In other day trading news, the Yen advanced for the first time in three days versus the U.S. Dollar after Japan’s Finance Minister, Taro Aso, stated that his government has no intentions of purchasing foreign bonds to stem deflation by debasing the currency. The Yen rebounded from the weakest price since May 2010 against the greenback as Aso’s statement contradicted that of Prime Minister Shinzo Abe who suggested that the country may opt for buying overseas bonds. Minutes from the latest Bank of Japan policy meeting revealed that several of the board’s members favored extending the maturity of the bonds purchased by up to five years. The minutes also confirmed that the bank doubled the inflation target to 2%.
Elsewhere, the Australian Dollar climbed for a second consecutive day against the greenback following the release of the Reserve Bank of Australia’s policy meeting minutes, which showed that the price of a number of metals and crude oil increased due to improvements for the outlook of the global economy.
The New Zealand Dollar declined against all of its Forex peers on news that China’s Quarantine Administration destroyed milk powder imported from the South Pacific nation.