The euro rose on Tuesday as better-than-expected economic data boosted riskier assets and triggered short-covering, but it was likely to remain pressured in 2012 on worries over high sovereign debt and low growth in the euro-zone.
Sentiment was boosted by better Chinese manufacturing and service data, while German unemployment fell more than forecast after Monday's manufacturing PMI showed less contraction than expected.
A rally in European shares on the back of the figures suggested warming appetite for riskier assets at the start of the year.
This pushed the euro 1% higher on the day to $1.3059 U.S., pulling away from its 2011 trough of $1.2858 U.S. hit last week on trading platform EBS. The single currency started 2012 on an upbeat note, having lost 3% last year.
Traders reported demand for euros from U.S. and U.K. banks, which also contributed to its recovery from an 11-year low against the yen touched the previous day.
But persistent worries about high sovereign debt levels and a lack of policy solutions to a crisis now in its third year -- which threatens to push the region's economy into recession -- were expected to keep the euro under pressure.
Traders said stops in the euro were triggered through $1.3020 en route to the day's high, before it trimmed gains to trade around $1.3030 U.S., its upside capped by offers reported from
around $1.3050 U.S. through $1.3080 U.S.
Against the yen, the euro rose 0.6% to 100.13 yen. It fell to 98.71 yen in holiday-thinned trade on Monday, its lowest since December 2000.
Investors are particularly concerned over Italy as it faces around 100 billion euros of bond redemption and coupon payments in the first four months of 2012, with 10-year borrowing costs
near the crucial 7% level.
Worries over Greece were reinforced after a government spokesman said it would have to leave the euro zone if it failed to clinch a deal on a second 130-billion-euro bailout with its international lenders.
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