Bundesbank boosts euro; US yield rise limits dollar losses
The euro rose to a two-week high against the yen and edged higher versus the dollar on Monday, boosted by comments from the Bundesbank which suggested that the European Central Bank's low interest rate pledge last month was not set in stone and would depend on the medium-term outlook for inflation.
In its August monthly report, the Bundesbank said the ECB's forward guidance on low interest rates was "not an unconditional commitment."
The euro's gains, however, were limited by the rise in U.S. 10-year Treasury yields on Monday, which advanced to 2.90 percent, their highest in two years. Investors looked ahead to Wednesday's release of the Federal Reserve's minutes of the July meeting, which could strengthen the view that the U.S. central bank could soon taper its bond-buying program.
The euro rose 0.1 percent to last trade at $1.3337, within sight of the $1.3400 level it touched on Aug. 8, the highest since June 19, according to Reuters data. Against the yen, the euro rose 0.2 percent to 130.14 yen. It hit a peak of 131.03 yen, the euro's highest since August 5.
Against the yen, the dollar was last nearly flat at 97.55 yen. Chartists said if the dollar breaks above the Aug. 15 peak of 98.64 yen, it could retest the August high of 99.94 yen.