BLBG:Euro Weakens to Two-Month Low Against Yen Before German Confidence Report
The euro fell to a two-month low against the yen before a report today that economists forecast will show German investor confidence slid to a three-year low.
The 17-nation currency also reached the weakest level since February against the British pound as Spain and the region’s bailout fund prepared to auction short-dated debt, amid concern sovereign credit ratings in the region may be cut. The dollar declined against the yen before the Federal Reserve holds a policy meeting today on speculation officials will maintain their pledge to keep borrowing costs near a record low.
The German confidence index “could once again highlight the deteriorating economic situation in the euro zone,” said Ian Stannard, head of European foreign-exchange strategy at Morgan Stanley in London. “If that’s the case then we’re going to see the euro coming under further pressure. That ratings agencies are still scrutinizing the sovereigns and the banks is going to remain a negative for the euro.”
The euro fell as much as 0.3 percent to 102.43 yen, the least since Oct. 10, and was at 102.59 yen at 9:30 a.m. London time. It was little changed at $1.3177 after falling as much as 0.2 percent to $1.3161, the lowest level since Oct. 4. A break through the $1.3146 level would take the currency to its weakest since January. The greenback dipped 0.2 percent to 77.82 yen.
To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
