Euro Gains Versus Dollar as German Business Sentiment Rises

The euro rose from within a half cent of an 11-month low against the dollar after an Ifo report showed German business confidence unexpectedly increased and borrowing costs fell at a Spanish bill sale.

The U.S. currency fell against all of its 16 most-traded counterparts tracked by Bloomberg on reduced demand for a refuge. Sweden’s krona and the Australian dollar rallied after central banks signaled they may hold off on cuts in interest rates at the start of 2012. The pound gained as U.K. consumer confidence rose from a record low.

“The Ifo index for Germany certainly surprised to the upside,” said Ulrich Leuchtmann, head of currency strategy at Commerzbank AG in Frankfurt. “This is good news for the euro.”

The 17-nation euro appreciated 0.5 percent to $1.3067 at 7:21 a.m. New York time, after falling to as low as $1.2946 on Dec. 14, the least since Jan. 11. Europe’s shared currency strengthened 0.4 percent to 101.83 yen. The dollar decreased 0.1 percent to 77.94 yen.

The Stoxx Europe 600 Index of equities gained 0.4 percent, and futures on the Standard & Poor’s 500 Index advanced 0.8 percent. Treasury 10-year notes fell, pushing the yield three basis points higher to 1.84 percent.

Australia’s dollar rose 1 percent to 99.94 U.S. cents after minutes of the last central bank meeting showed policy makers saw a continued expansion in the domestic economy even as Europe’s debt crisis weighed on global growth. “Solid growth” among trading partners has tempered the need for lower rates, the minutes said.