The euro bounced against the dollar to hit a 5-month high after news that Moody’s upgraded Spain’s credit outlook to stable from negative. The ratings agency cited a brighter medium-term view for the Spanish economy.
EURUSD jumped to $1.3638 late in the Asian session, up from the session open of $1.3592 and off yesterday’s low of $1.3527. Focus now turns to the European Central Bank policy meeting later today. Expectations are for interest rates to remain unchanged.
The euro is also being buoyed by data from yesterday which showed the Euro zone’s final services PMI rise to 51.2 in November, up from a preliminary reading of 50.9 and compared to 51.6 in October.
Sterling will also be in focus today since the Bank of England is due to make an announcement on its policy decision. GBPUSD was mostly range-bound during the session, trading near yesterday’s highs when the pound rose on strong UK series PMI data. The pair traded around support at $1.6368 and ended the session up at $ 1.6388.
The dollar remained weak against the yen, easing back towards yesterday’s lows. USDJPY ended the session at 102.07 yen. Mixed-US data yesterday produced alot of volatility for the dollar. Initial data from ADP showed encouraging jobs data but then disappointing data followed from ISM on the services sector, which hurt the dollar. The nonfarm payrolls report on Friday will be a key driver for the dollar.