BS: Euro Reverses Gains as Trichet Delays Exit From Stimulus Steps
Dec. 2 (Bloomberg) -- The euro declined against the dollar after European Central Bank Jean-Claude Trichet signaled policy makers will delay their withdrawal of stimulus measures and said record-low interest rates are “appropriate.”
The ECB’s governing council will continue the emergency measures “with full allotment as along as needed, and at least until April 12,” Trichet said at a press conference in Frankfurt today after the central bank left its benchmark rate at a record low of 1 percent.
The euro slid 0.4 percent to $1.3085 at 1:57 p.m. in London from $1.3139 in New York yesterday. It rose as much as 0.6 percent before Trichet spoke. The currency reached $1.2969 two days ago, the least since Sept. 15. The euro bought 110.46 yen, from 110.58. The dollar was at 84.30 yen, from 84.19 yesterday.
Europe’s common currency rose earlier as Spain sold 2.5 billion euros ($3.3 billion) of notes due October 2013, with investors bidding for 2.27 times the securities on offer. That surpassed the bid-to-cover ratio of 2.16 at a similar sale in October, renewing confidence that so-called peripheral nations could sell debt in the wake of Ireland’s bailout.
The euro has dropped 3.6 percent in the past month, according to Bloomberg Correlation-Weighted Indexes, which track a basket of 10 developed-country currencies, amid concern that the region’s debt crisis would spread. The ECB’s decision to keep the refinancing rate at 1 percent was predicted by all 52 economists in a Bloomberg survey.
--Editors: Keith Campbell, Robert Burgess.
To contact the reporters on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net.
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
