The euro was set for a second straight weekly decline against the dollar as a report showed industrial production in the region fell in June. The 17-nation currency was poised for its biggest weekly drop in a month against the yen as traders bet the European Central Bank may cut its key interest rate as austerity measures crimp growth. The Swiss franc depreciated against the euro even after data showed France’s economy stalled in the second quarter. The Australian and New Zealand currencies weakened before data that may show U.S. consumer confidence dropped to the lowest level in more than two years. The decline in industrial production, along with signs of stalling economic growth “adds to the gloomy environment,” said Jane Foley, a senior foreign-exchange strategist at Rabobank International in London. “When you mix all these numbers together you have a painful course for economic growth, suggesting a long drawn-out recovery.” An interest rate cut by the ECB is “not something we should rule out,” she said. “It’s not likely the next month or so, but maybe later this year or next” The euro traded at $1.4231 at 10:04 a.m. in London, from $1.4241 yesterday in New York and $1.4282 a week ago. The common currency declined 0.2 percent to 109.24 yen, down 2.5 percent since Aug. 5, the most since the period ended July 15. The dollar bought 76.71 yen, from 76.84 yesterday. The Swiss franc depreciated 1.4 percent to 1.09982 per euro, extending yesterday’s 5.3 percent plunge, and weakened 1.5 percent against the dollar to 77.27 centimes. Industrial production in the euro area fell 0.7 percent in June after a 0.2 percent increase in May. A Bloomberg News survey of economists forecast no change. Factory output rose 2.9 percent in the year to June, compared with a forecast 4.2 percent increase. To contact the reporters on this story: Keith Jenkins in London at kjenkins3@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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