BLBG:Yen Falls for Third Day Before U.S. Retail Sales; Euro Advances
The yen weakened for a third day against the dollar and euro before a U.S. report that economists said will show retail sales rose in September, reducing demand for the safety of Japan’s currency.
The yen declined against all except one of its 16 major counterparts as European stocks advanced, boosting investor appetite for higher-yielding assets. The euro strengthened to a one-week high against the yen after German Finance Minister Wolfgang Schaeuble said a Greek sovereign default “will not happen.” The pound dropped against the euro amid speculation U.K. inflation slowed last month, strengthening the case for more asset purchases.
U.S. retail sales will “underline that at least one leg of the global economy is just about managing to hold up,” said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “The euro-zone environment doesn’t look particularly negative. Probably you want to be short the yen into the start of this week.” A short position is a bet an asset will decline.
The yen depreciated 0.3 percent to 78.69 per dollar at 10:47 a.m. London time after dropping 0.3 percent over the previous two trading days. Japan’s currency fell 0.4 percent to 101.99 per euro after reaching 102.09, the weakest level since Oct. 8. The euro gained 0.1 percent to $1.2961.
‘Reasonably Attractive’
The euro trading weaker than 102 yen is “reasonably attractive” and the European currency may extend its advance toward 104 yen, Stretch said.
The yen has fallen 4.7 percent this year, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar and the euro both slipped 2.2 percent.
U.S. retail sales increased 0.8 percent last month, after a 0.9 percent gain in August, according to the median prediction of 66 economists surveyed by Bloomberg News before the Commerce Department releases the report at 8:30 a.m. in Washington.
The Stoxx Europe 600 Index (SXXP) of shares gained 0.7 percent and futures on the Standard & Poor’s 500 Index gained 0.5 percent.
“It will not happen that there will be a ‘Staatsbankrott’ in Greece,” Schaeuble said at a forum in Singapore yesterday. “Greece has had to take a lot of very serious reforms” and an increasing majority of the population “does understand that being a member of the common European currency is in the best interest of Greece,” he said.
European Union leaders will meet in Brussels on Oct. 18-19.
The pound weakened 0.1 percent to 80.64 pence per euro and was little changed at $1.6074.
Britain’s annual inflation rate dropped to 2.2 percent in September, from 2.5 percent in August, according to the median estimate of economists in a Bloomberg News survey before the data is released tomorrow.
To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
