Nebulous circumstances about Sunday's presidential election in France, host of the euro zone's second-largest economy, also tugged at the common currency. The monetary unit's climb on the last trade day of the week was linked to the Ifo business climate index survey indicating business sentiment was stronger than anticipated in Germany, host of the euro zone's largest economy.
"The Ifo surprised once again to the upside so we gained a bit of intra-day volatility but the wider ranges are still very tight," currency strategist Chris Walker with UBS told Reuters. "Spanish yields are back close to 6 percent and that's clearly the focus of the markets in the longer-term. The euro could break below $1.30 if there is big escalation in Spanish yields or if French bonds take off."
The past few days have seen concerns about Spain's deficit, banking sector and poor growth outlook gain while investors and analysts eye bond yields.
Friday marks the final day of campaigning for the French presidency between incumbent leader Nicolas Sarkozy, a conservative, and Francois Hollande of the Socialist party, according to The Wall Street Journal. With the election on Sunday, the nation outlaws electioneering the day prior to the election.
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