The dollar and the Swiss franc weakened against the euro for the first time in four days as stocks rose and Treasuries declined amid renewed demand for higher-yielding assets.
The U.S. currency slid against the Australian and New Zealand dollars after China’s economic growth exceeded analysts’ estimates and minutes from a Federal Reserve meeting showed some policy makers felt additional stimulus may be needed. The euro was stronger against 14 of its 16 major peers as Italian and Spanish bonds rose for a second day. The yen weakened versus the 17-nation currency amid speculation Japan will sell its currency to support exporters.
China’s gross domestic product increased 9.5% in the second quarter from a year earlier, the statistics bureau said in Beijing. The median estimate was 9.3%. Industrial output advanced 15.1% in June, the most since May 2010.
“We saw broadly better-than-expected Chinese data and that has given the market a little bit of comfort,” said Sara Yates, a foreign exchange strategist in London at Barclays Plc. “For the U.S., interest-rate hikes are a long way into the future. We still look for the euro to grind higher but there are still significant risks.”
Italian bonds rallied for a second day, pushing the yield on the 10-year security down 12 basis points, and easing concern that the region’s debt crisis may spread beyond Greece, Ireland and Portugal to larger economies.
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