EU session review: Yen, Dollar strengthen on speculation unrest in Middle East will intensify

Data released:
07:58     France     PMI (February) flash    55.3    55.4    54.9
07:58     France     PMI services (February) flash    60.8    57.9    57.8
08:28     Germany     PMI (February) flash    62.6    60.1    60.5
08:28     Germany     PMI services (February) flash    59.5    60.4    60.3
08:58     EU(17)     PMI (February) flash    59.0    57.1    57.3
08:58     EU(17)     PMI services (February) flash    57.2    56.1    55.9
09:00     Germany     IFO business climate index (February)    111.2    110.5    110.3
    
The yen and the dollar strengthened against most of their major counterparts as concern that unrest in the Middle East will spread boosted demand for safer assets.
Japan’s currency rose from a three-month low against the euro as stocks fell in Europe and Asia. Libyan leader Muammar Qaddafi’s son Saif said the country may have a civil war.
The euro dropped after German Chancellor Angela Merkel’s Christian Democratic Union suffered an election defeat in the country’s richest state, fuelling concern that European Union attempts to deal with the sovereign debt crisis will be derailed.
Europe’s common currency pared losses after a report showed German business confidence unexpectedly rose to a record in February. The Munich-based Ifo institute said its business climate index increased to 111.2 from 110.3 in January. That’s the highest since records for a reunified Germany began in 1991.
“It’s the better-expected Ifo data today which is pushing the euro versus the franc,” said Ursina Kubli, a currency analyst at Bank Sarasin & Cie. “All in all, the franc is overvalued at the moment.”
New Zealand’s dollar climbed on speculation Fonterra Cooperative Group Ltd. will raise its forecast for payouts to farmers.
The board of Auckland-based Fonterra, the world’s largest dairy exporter, meets tomorrow after whole milk powder prices climbed to a 31-month high. The dairy exporter raised its forecast payment to farmers by 4.5% on Dec. 10, citing higher international prices.

EUR/USD printed high on $1.3710 after strong data before retreated to lows around $1.3660. Since then rate holds within the range.

GBP/USD fell from $1.6245 to $1.6200, but it failed to break under the figure and remains a bit above $1.6200.

USD/JPY holds between Y83.06/22 range.

There is no major data for today. US markets are closed in observance of President's Day.