BLBG:Euro Reaches Five-Week Low as EU’s Barroso Says Debt Crisis Is ‘Systemic’
The euro declined, falling to within two cents of a five-week low against the dollar as European Commission President Jose Barroso said the region is facing a “truly systemic crisis.”
The 17-nation currency pared its decline after the European Central Bank was said to be buying Spanish and Italian government bonds, narrowing their yield gap over benchmark German bunds. The pound fell for a third day against the dollar as unemployment increased and joblessness among young people climbed above 1 million for the first time since at least 1992.
“Each day that goes by the situation is getting worse, and it’s inevitable under those circumstances that the currency comes under pressure,” said Derek Halpenny, European head of currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “There’s unbelievably difficult decisions that lie ahead for Europe in terms of resolving this crisis.”
The euro fell 0.3 percent to $1.3502 at 10:48 a.m. London time, after touching $1.3429, the weakest level since Oct. 10. The shared currency declined 0.5 percent to 103.83 yen after weakening to 103.41 yen. Japan’s currency strengthened 0.1 percent to 76.94 versus the dollar.
Europe’s economic recovery has hit a standstill, Barroso said today at the European Parliament in Strasbourg, France. There is “no way out of the crisis” without economic growth in Europe, he said.
The ECB bought larger-than-usual sizes and quantities of the Italian debt, said two people with knowledge of the trades, who declined to be identified because the deals are private. Central bank press officers couldn’t immediately be reached for comment when called by Bloomberg News.
U.K. Unemployment
The euro has dropped 1.5 percent over the past six months, according to Bloomberg Correlation-Weighted Indexes. The yen has gained 7.5 percent and the dollar has risen 3.5 percent, the best performers among the 10 developed-nation peers tracked by the gauge.
British unemployment as measured by International Labour Organization standards rose by 129,000 to 2.62 million, the biggest increase since 2009, the Office for National Statistics said in London today. The jobless rate climbed to a 15-year high of 8.3 percent. The number of unemployment-benefit claims rose 5,300 to 1.6 million in October. Economists had forecast an increase of 21,000, according to the median of 24 estimates in a Bloomberg News survey.
The pound weakened 0.3 percent to $1.5768 after being as low as $1.5745, the least since Oct. 20. It strengthened 0.1 percent to 85.50 pence per euro.
To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
