BLBG:Euro Falls as Unemployment Rises to Record; Swedish Krona Gains
The euro declined to a five-week low against the yen as a report showed unemployment in the 17-nation region climbed to a record in February, adding to concern the economy will struggle to emerge from recession.
The single currency dropped against 12 of its 16 major counterparts as a gauge of manufacturing based on a survey of purchasing managers remained below the level that shows contraction. The yen strengthened as investors weighed the chances of new stimulus from the Bank of Japan (8301) at a two-day meeting starting tomorrow. Sweden’s krona gained for a second day versus the dollar after manufacturing expanded. The European Central Bank meets to review policy on April 4.
“Euro-area PMIs are stuck in recessionary territory,” said Lee Hardman, a currency strategist at Bank of Tokyo- Mitsubishi UFJ Ltd. in London. “Weaker growth outside of Japan and globally are still more supportive for the yen. The ECB will acknowledge this week that the pace of economic recovery remains disappointingly weak, which will dampen upside potential for the euro.”
The euro dropped 0.2 percent to 119.58 yen at 10:30 a.m. in London after declining to 119.15, the weakest level since Feb 26. The common currency fell 0.1 percent to $1.2834. The yen was little changed at 93.19 per dollar after climbing to 92.57, the strongest since March 1.
Unemployment in the euro area increased to 12 percent and the January figure was revised up to the same level from 11.9 percent estimated earlier, the European Union’s statistics office said. That’s the highest level since the data series started in 1995.
Manufacturing Contracts
A gauge of manufacturing in the region declined to 46.8 last month from 47.9 in February, Markit Economics said. A reading below 50 indicates contraction.
The euro has declined 1.8 percent in the past month according to Bloomberg Correlation-Weighted Indexes. The dollar dropped 0.3 percent, while the yen climbed 0.2 percent.
A PMI index for Sweden rose to a seasonally adjusted 52.1 in March from 50.9 the previous month, Stockholm-based Swedbank AB (SWEDA), which compiles the index, said. A reading higher than 50 indicates growth.
The krona advanced 0.5 percent to 6.4813 per dollar after rising 0.2 percent yesterday. It strengthened 0.6 percent to 8.3203 per euro.
To contact the reporter on this story: Neal Armstrong in London at narmstrong8@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
