The euro gained against the safe haven dollar and yen on Tuesday as investors cheered data that showed Spain's economy contracted less than expected in the third quarter.

The single currency was also boosted by a decline in Italy's borrowing costs following its latest debt sale.

The euro rose to a session high of $1.2983, in lighter than usual trading, before trading at around $1.2959 later in the session.

Meanwhile US trading desks remained thinly staffed as hurricane Sandy battered the US.

The ICE dollar index, which measures the US dollar against a basket of six other major currencies, tumbled to a low of 79.827 before later trading at around 79.943 later in the session.

The Japanese yen firmed against the greenback after the Bank of Japan's monetary easing steps disappointed. Investors had hoped the central bank would take more aggressive asset purchases.

Sterling rallied against the dollar after figures showed stronger-than-expected UK retail sales in October.



CJ

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