LONDON (AFP) – The European single currency rose against the dollar on Monday on news of a jump in US home sales and buoyant consumer confidence in Germany, the biggest economy in the eurozone, dealers said.In late afternoon London trade, the euro rose to 1.4224 dollars from 1.4206 dollars in New York late on Friday. The euro also gained against the Japanese yen, rising to 135.60 yen from 134.74 yen previously.
The dollar climbed to 95.33 yen from 94.83 yen reached late Friday.
"German consumer confidence figures further increased the good feeling for the euro, lifting the market close to the 1.4300 psychological level," said James Hughes, an analyst at online spread betting firm CMC Markets.
Despite suffering the worst economic crisis since 1945, a closely-watched survey published on Monday showed German consumers are ever more confident about the future and willing to part with their hard-earned cash.
The GfK institute's consumer confidence index rose to an estimated 3.5 points in August from a revised 3.0 points in July, it said in a statement, raising hopes for a consumer-led boost to the ailing economy.
Economic recovery hopes were further buoyed by US Commerce Department data showing an 11-percent leap in new US home sales in a further sign of recovery for the sector at the epicentre of the global financial crisis.
Greater optimism about the world economy helped push up stock markets too, with London's FTSE 100 index matching its record of 11 consecutive gains.
The recent rebound in global share prices has reduced the appeal of the safe-haven greenback, said Hachijuni Bank forex strategist Yoshifumi Suzuki.
"Investors are snapping up risky assets" on hopes of positive economic and corporate earnings news, he added.
The euro is considered riskier than safe-haven currencies such as the dollar and therefore does better at times of greater economic stability.
Hughes from CMC Markets said: "As stocks and commodities continue to rally traders will remain willing to take on the risk trade and with a growing feeling that the worst of the recession is now over it may take something drastic to drag traders back to the safe haven trade."
Dealers also said they were waiting for a slew of earnings reports this week from Japanese giants Nissan, Honda, Hitachi, Toshiba and Sony, as well as second-quarter gross domestic product (GDP) figures from the United States.
Positive market sentiment was supported by eurozone data late last week that appeared to signal a moderation in the pace of the region's economic downturn.
In London trading on Monday, the euro was changing hands at 1.4224 dollars against 1.4206 dollars late on Friday, 135.60 yen (134.74), 0.8633 pounds (0.8641) and 1.5243 Swiss francs (1.5218).
The dollar stood at 95.33 yen (94.83) and 1.0713 Swiss francs (1.0710).
The pound was at 1.6479 dollars (1.6436).
On the London Bullion Market, the price of gold rose to 955.00 dollars an ounce from 951.50 dollars an ounce late on Friday.
