BLBG:Euro Within 0.2% of Two-Month Low on Greece; Aussie Strengthens
The euro was within 0.2 percent of a two-month low against the dollar as European policy makers prepared to meet to seek a plan to maintain Greece’s solvency and keep the nation in the common currency.
Europe’s shared currency was little changed versus most of its major counterparts. Japan’s currency weakened earlier after data showed the nation’s economy contracted in the third quarter at the fastest pace since last year’s record earthquake. Australia’s dollar gained against all its major counterparts after a bigger-than-estimated trade surplus in China improved prospects for commodity exports.
“Euro risk factors are dominated by all things Greek,” said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “There’s residual uncertainty and the euro is going to remain under pressure.”
The euro declined less than 0.1 percent to $1.2706 at 10:04 a.m. London time after falling to $1.2690 on Nov. 9, the weakest since Sept. 7. The common currency was little changed at 100.94 yen after sliding 2.1 percent last week. The yen was little changed at 79.44 per dollar.
Finance ministers from the 17-member euro-region will meet at 5 p.m. in Brussels after Greek Prime Minister Antonis Samaras gained enough support from lawmakers in his three-party coalition to pass the 2013 budget. A total of 167 lawmakers in Greece’s 300-strong chamber backed the budget, with 128 voting against and four saying only that they were “present,” parliament speaker Evangelos Meimarakis said in comments broadcast live on Vouli TV.
‘Decisive Step’
“We’ve taken the second decisive step with even greater unity,” Samaras said. “What we’ll see from now on is recovery and growth.”
The 14-day relative-strength index for the euro against the dollar was 33.5, the lowest level since July 24, according to data compiled by Bloomberg. A level below 30 indicates an asset may be “oversold” and has fallen too quickly.
Europe’s shared currency has fallen 3.4 percent so far this year, the second-worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes after the yen, which has declined 4.8 percent. The dollar has weakened 1.2 percent.
In Japan, gross domestic product fell an annualized 3.5 percent in the three months through September, after a revised 0.3 percent gain the previous quarter, the Cabinet Office said in Tokyo today. The median of 23 estimates in a Bloomberg News survey was for a 3.4 percent drop.
‘Monetary Easing’
Bank of Japan (8301) Governor Masaaki Shirakawa said today that “the bank is committed to continuing with aggressive monetary easing,” underscoring his struggle to reverse a decade of deflation. The BOJ increased its asset-purchase program by 11 trillion yen to 66 trillion yen on Oct. 30. Shirakawa and his board next gather on Nov. 19-20.
Australia’s dollar has strengthened 1.1 percent this year, the Bloomberg correlation-weighted indexes show.
China’s exports exceeded imports by $32 billion in October, the customs administration said Nov. 10, compared with a $27.3 billion trade surplus estimated by economists surveyed by Bloomberg. China is Australia’s biggest trading partner.
“The Chinese story improving would tend to be somewhat supportive of Australian dollar strength going forward,” said Gavin Stacey, a Sydney-based strategist at Barclays Plc.
The so-called Aussie rose 0.4 percent to $1.0429 and strengthened 0.4 percent to 82.87 yen.
To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
