Euro Advances As German Business Confidence Improves

The euro advanced against its major counterparts in early European deals on Friday, as German business sentiment improved further in November and political worries over Germany eased after Social Democrats decided to hold talks on forming a coalition government.

Survey results from Ifo Institute showed that German business confidence index rose to 117.5 in November.

The score was forecast to remain unchanged at October's initially estimated value of 116.7.

Meanwhile, the current conditions index came in at 124.4, below the forecast of 125.0.

At the same time, the expectations index climbed to 111 in November versus the expected score of 108.8.

SPD Secretary General Hubertus Heil said that the party is ready to hold talks with Angela Merkel's conservatives to help resolve the political deadlock since the September election.

"The SPD won't close the door on talks," Heil said.

The currency has been trading in a positive territory in the Asian session.

The euro advanced to a 4-day high of 132.35 against the yen and a 3-day high of 1.1649 against the franc, from its early lows of 131.73 and 1.1621, respectively. The euro is likely to target resistance around 134.00 against the yen and 1.19 against the franc.

The single currency hit a weekly high of 1.5607 against the aussie, new 4-week high of 1.5131 against the loonie and a 3-day high of 1.7285 against the kiwi, off its previous lows of 1.5522, 1.5055 and 1.7185, respectively. If the euro rises further, 1.58, 1.53 and 1.77 are possibly seen as its next resistance levels against the aussie, loonie and the kiwi, respectively.

The 19-nation currency hit a 6-week high of 1.1875 against the greenback, after having fallen to 1.1837 at am ET. The euro is seen finding resistance around the 1.20 mark.

The common currency rose back to 0.8914 against the pound, not far from its previous session's 4-day high of 0.8922. Continuation of the euro's uptrend may see it challenging resistance around the 0.90 region.

Looking ahead, Markit's U.S. preliminary manufacturing index for November is set for release in the New York session.