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Forex - EUR/JPY gains as key ECB figure says euro not overvalued

Posted: 2/11/2013 4:45:00 PM
Referenced Stocks: - The euro shot up against the yen on Monday after a key European central banker said the euro wasn't overvalued despite its recent strengthening trend, which sparked a rally for the single currency.

French industrial production figures moved the euro up against safe-haven currencies such as the yen as well.

In U.S. trading on Monday, EUR/JPY hit 125.17, up 1.01% and up from a low of 123.52 and off a high of 125.50.

The pair sought to test support at 123.44, Friday's low, and resistance at 127.70, Wednesday's high.

European Central Bank council member Jens Weidmann said earlier Monday that the euro hasn't become too seriously overvalued despite its recent strengthening trend and urged eurozone governments against calling for measures to weaken the currency.

Weidmann's words sent the euro gaining, especially against the dollar and the yen.

French output numbers fueled the rally as well.

France's industrial output contracted by 0.1% in December from the month before, less than market calls for a 0.2% contraction though still down from November's 0.5% gain.

Japanese markets were closed in observance of the National Founding Day holiday.

The euro, meanwhile, was up against the pound and up against the Canadian dollar, with EUR/GBP trading up 1.02% at 0.8548 and EUR/CAD trading up 0.34% at 1.3454.

On Tuesday in the eurozone, the Economic and Financial Affairs Council will hold talks in Brussels.

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