Summary Euro gained ground against dollar after a strong report on German industrial output in March.
NEW YORK (AFP) - The euro gained ground Wednesday against the dollar and the yen after a surprisingly strong report on German industrial output in March.
The euro bought $1.3156 at 2100 GMT Wednesday, up from $1.3074 late Tuesday.
The euro traded at 130.25 yen, up from 129.47 the prior day.
The dollar edged higher on the yen, trading at 99.01 compared with 98.99.
Markets were caught off guard by a positive German economic indicator for the second day in a row. On Tuesday, data showed German industrial orders rose unexpectedly in March.
On Wednesday, data showed that Germany's industrial production rose by 1.2 percent in March, well above the 0.2 percent decline expected by analysts.
The results "smashed" expectations, according to a Western Union Business Solutions market note.
"This caused traders to stampede back into the euro during the London session, as traders began to curtail the thought of another possible interest rate cut that has been dogging the euro since last week's European Central Bank (ECB) meeting."
The euro gained further strength on news that Portugal successfully returned to the long-term debt market for the first time since obtaining bailout funding two years ago. Portugal priced $3 billion euros at an interest rate of 5.669 and saw buying interest of more than $10 billion.
Meanwhile, a quiet US economic calendar has left investors with little fresh news on which to base the dollar versus other currencies.
"Going forward, further signs that the US economy is improving at a better pace than expected will continue to support the dollar," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
"Over the very near-term however, lack of data or news to trade off of could keep the greenback biased somewhat lower."
The British pound traded at $1.5536, up from $1.5482 late Tuesday.
The dollar traded at 0.9352 Swiss franc, down from 0.9401.
