The euro edged higher against its major rivals in early deals on Monday as majority of European equities are trading green on positive German industrial production data.
Germany's industrial production rose more-than-expected in February, helped by an increase in manufacturing output, underpinning hopes that the biggest euro area economy is on the recovery path after shrinking in the final months of 2012, latest data showed.
Industrial production advanced a seasonally and working-day adjusted 0.5 percent sequentially, reversing January's revised 0.6 percent decrease, the Economy Ministry said. Economists had expected production to grow by 0.3 percent in February, marking an improvement from January's originally reported flat level.
Meanwhile, investor confidence in the euro area weakened for the second successive month in April, and at a significant pace, data released by the think-tank Sentix showed today.
The index fell to -17.3 in April from -10.6 in the prior month. The latest figure was worse-than the expected level of -12.8.
The measure of current situation fell sharply to -33.5 in April from -27.8 in March, while the expectations sub-index dropped to 0.5 from 8.3.
In news out of Europe, Italy's caretaker government has approved the payment of EUR 40 billion of debt owed by government to private companies. The settlement of bills to be made over the coming 12 months will boost liquidity of cash-strapped firms and help to revive the economy.
Portuguese Prime Minister Pedro Passos Coelho has called for severe cuts in public spending on health, education and social security after the Constitutional Court struck down some of the austerity measures introduced as part of the 2013 budget aimed at meeting the bailout terms agreed with the European Union and the International Monetary Fund.
The court said plans to cut public employee wages and retiree pensions violated the constitutional principle of equality. The court also rejected reduction in unemployment benefits.
Switzerland's industrial production increased at a slower rate in the fourth quarter, preliminary data released by the Federal Statistical Office showed today. Industrial production increased 1.7 percent on an annual basis in the fourth quarter, notably slower than the 2.5 percent gain seen in the preceding quarter.
The yen was down in the morning amid reports that the Bank of Japan will start buying long dated government bonds worth 1.2 trillion yen early in the week, as per the easing measures outlined last week.
The euro rose to 1.3039 against the US dollar, adding 0.34 percent from Friday's close of 1.2994. The euro-buck pair, which is now challenging last week's 11-day high of 1.3041, may find target around the 1.3080 area on the upside.
The common currency climbed to 128.8650 against the yen, its strongest level since January 2010. The next major barrier for the pair is visible at 130.0.
The euro also advanced to 1.2175 against the Swiss franc, appreciating almost 0.7 percent from its Asian session's 6-week low of 1.2129. If the pair extends advance, 1.2185 is seen as the next likely target level.
The 17-nation shared currency also jumped to 0.8512 against the pound, compared to last week's closing value of 0.8470. The next likely resistance level for the currency cross is seen around the 0.8545/0.8550 area.
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