BLBG:Euro Falls 3rd Day as Demand Falls at Spain Auction Before ECB
The euro weakened for a third day against the dollar after demand declined at a Spanish bond auction, adding to concern the region is struggling to overcome its sovereign debt crisis.
The 17-nation currency dropped to a three-week low versus the yen as stocks slid around the world, boosting demand for the relative safety of the Japanese and U.S. currencies. European Central Bank officials meet to review monetary policy today. Australia’s dollar declined after the nation reported an unexpected trade deficit.
“The euro should continue to weaken,” said Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce in London. “The questions over the periphery continue to be very large,” he said, referring to Europe’s high debt and deficit nations.
The euro depreciated 0.5 percent to $1.3165 at 10:43 a.m. London time after dropping to $1.3161, the weakest since March 22. Europe’s shared currency dropped 1.1 percent to 108.42 yen. It earlier reached 108.24, the lowest since March 13. The yen advanced 0.5 percent to 82.37 per dollar.
Spain sold 2.59 billion euros of bonds, the central bank said, less than its maximum target of 3.5 billion euros. Demand for the 2015 bonds was 2.41 times the amount allotted, compared with 4.96 when the securities were sold in March.
The ECB will keep its key rate unchanged at 1 percent today, according to all 57 forecasters surveyed by Bloomberg News before the announcement. ECB President Mario Draghi will hold a press conference following the decision.
The Australian dollar declined 0.7 percent to $1.0261.
To contact the reporters on this story: Emma Charlton in London at echarlton1@bloomberg.net; Kristine Aquino in Singapore at kaquino1@bloomberg.net.
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
