SF: Euro Trades Near Six-Week Low as Ireland Denies Bailout Talk
Nov. 15 (Bloomberg) -- The euro traded near a six-week low against the dollar as Ireland denied speculation it was seeking a rescue before tomorrow's meeting of European finance chiefs.
Europe's currency fell versus the Australian and New Zealand dollars after Enterprise Minister Batt O'Keeffe said yesterday Ireland has no immediate need for cash. Germany is pressing Ireland to seek aid. The dollar was near a five-week high versus the yen before a report forecast to show U.S. retail sales rose for a fourth month. New Zealand's dollar gained after a report showed that retail sales unexpectedly advanced.
"It's easy to find faults about the euro when you think of bailout risks for some nations," said Kazuyuki Kato, treasury department manager in Tokyo at Mizuho Trust & Banking Co., a unit of Japan's second-largest publicly traded lender by assets. "People want to buy back the dollar, and selling the euro against it is an easy option."
The 16-nation currency was at $1.3704 as of 8:52 a.m. in Tokyo from $1.3691 in New York on Nov. 12, when it reached $1.3574, the lowest since Sept. 30. The euro was at 113.03 yen from 113.02 yen, after hitting 111.05 yen on Nov. 12, the weakest since Sept. 16. The dollar fetched 82.48 yen from 82.53 yen. It rose to 82.80 yen on Nov. 10, the highest since Oct. 7.
A bailout hasn't been discussed by Irish Prime Minister Brian Cowen's Cabinet, Enterprise Minister Batt O'Keeffe said yesterday on Dublin-based broadcaster RTE, refuting talk that there is a "crisis."
Record Spreads
The yield difference, or spread, between Irish 10-year securities and comparable bunds reached 652 basis points last week, the highest ever. The spread between 10-year Portuguese notes and bunds rose to a record 484 basis points on Nov. 11.
U.S retail sales gained 0.7 percent in October after rising 0.6 percent in September, according to the median estimate of economists in a Bloomberg News survey before today's data.
Movement in the yen was limited after the Cabinet Office reported Japan's gross domestic product. The economy grew an annualized 3.9 percent in the three months ended Sept. 30, the Cabinet Office said in Tokyo today. The median forecast of 21 economists surveyed by Bloomberg was for a 2.5 percent increase.
New Zealand's dollar rose 0.3 percent to 77.52 U.S. cents after a government report today showed the nation's retail sales, adjusted for inflation, gained 0.7 percent in the third quarter from the second.
--With assistance from Dara Doyle in Dublin and Candice Zachariahs in Sydney. Editors: Nate Hosoda, Nicholas Reynolds
