The euro rose on Friday after a better-than-expected a German business sentiment survey, but gains looked set to be capped by concerns over Spain's finances and uncertainty ahead of the first round of French presidential elections on Sunday.
Germany's Ifo business climate index rose to 109.9 in April versus a forecast of 109.5, in a sign the euro zone's largest economy continued to outpace the bloc's debt-ravaged southern states.
The euro rose 0.3 percent to a session high of $1.3180, but stayed in a range roughly between $1.30 to $1.32 that it has traded in since early April. Traders cited sizeable options expiries around $1.32 that were likely to check gains.
Despite signs German economic growth was still robust, the outlook for the euro zone and the common currency remained cloudy given Spanish bond yields were trading above 6 percent, within range of a 7-percent level that is seen as unsustainable.
Further pressure on Spanish and Italian yields could see the euro move towards the lower end of its recent range. Analysts said a break of strong resistance around $1.30 could open up the door to a test of the 2012 low of $1.2624, but most expected the euro to stay rangebound ahead of the French vote.
Gulf markets surge on stronger oil
Stock markets in Saudi Arabia and the UAE soared on Thursday after the price of oil rebounded and the Riyadh government eased investors’ fears by saying it would continue spending heavily on economic