BLBG:Euro Declines, Pares Four-Day Gain, on Europe Crisis, Slowdown Concern
The euro weakened, paring a four-day gain versus the dollar and yen, as European leaders struggled to convince investors they can craft an effective response to the region’s debt crisis.
The 17-nation currency fell from a six-week high against the dollar after a report showed European services and manufacturing output shrank more than estimated in September, adding to signs the slowdown is deepening. The dollar pared gains on speculation the Federal Reserve will consider a third round of debt purchases to boost the U.S. economy and as gains in stocks sapped demand for safety.
“Hopes that the euro-region sovereign debt crisis is about to ease significantly are wildly optimistic,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London.
The euro fell 0.2 percent to $1.3867 at 9:46 a.m. in London, after rising 1.2 percent over the previous four days. The currency weakened 0.4 percent to 105.53 yen. Japan’s currency was little changed at 76.19 per dollar, after rising to a post-World War II high of 75.82 on Oct. 21.
The benchmark Stoxx Europe 600 Index climbed 0.2 percent after earlier advancing as much as 0.8 percent.
To contact the reporters on this story: Emma Charlton in London at echarlton1@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
