Euro climbs above $1.50 after ZEW

LONDON (AFP) – The European single currency breached 1.50 dollars on Tuesday as traders digested a German investor sentiment survey which was only slightly worse than market expectations, analysts said.

In London late morning trade, the euro rose as high as 1.5020 dollars before pulling back to 1.5014. That compared with 1.4994 dollars late in New York on Monday.

Against the Japanese currency, the dollar fell to 89.81 yen from 89.95 yen late on Monday.

Sentiment among German investors dipped slightly in November and now stands at an indexed 51.1 points, the ZEW economic research institute said on Tuesday.

The barometer of Germany's financial sector had stood at 56.0 points in October. Analysts polled by Dow Jones Newswires had expected it to edge down to 54.0 points.

"Euro/dollar broke 1.50 once again but more positive news may be needed to extend euro gains further," said Calyon economist Frederik Ducrozet.

Ducrozet added that the ZEW survey would bolster market sentiment ahead of this week's upcoming eurozone gross domestic product (GDP) data.

"Overall, recent data bodes well for eurozone third-quarter GDP, due to be reported on Friday," he said.

"Against a background of euro-positive figures, today's disappointing ZEW index had little impact on the market."

The dollar had fallen sharply on Monday after the Group of 20 nations pledged in their joint statement at a meeting in Scotland to maintain economic stimulus measures, while refraining from commenting on foreign exchange issues.

The greenback also took a breather on Tuesday after falling a day earlier when investors bought riskier, higher-return currencies such as the euro, dealers said.

The euro is likely to benefit from any increased investor risk appetite because eurozone assets offer higher yield than the "safe-haven" dollar, which is a more popular bet in times of greater economic turbulence, dealers said.

Elsewhere, gold eased on Tuesday after striking an all-time peak of 1,111.20 dollars an ounce on Monday in response to rising demand from emerging economies and a decline in the value of the dollar.

In London on Tuesday, the euro was changing hands at 1.4998 dollars against 1.4994 dollars late on Monday, at 134.70 yen (134.89), 0.8987 pounds (0.8945) and 1.5109 Swiss francs (1.5115).

The dollar stood at 89.81 yen (89.95) and 1.0073 Swiss francs (1.0079).

The pound was at 1.6688 dollars (1.6759).

On the London Bullion Market, the price of gold dipped to 1,102.97 dollars an ounce from 1,110.97 dollars an ounce late on Monday.