BS: Euro Weakens for Third Day Against Dollar on Growth Concern
The euro weakened for a third day against the dollar after economists surveyed by the European Central Bank predicted the region’s contraction this year will be worse than previously forecast.
Europe’s shared currency dropped versus the yen after economists questioned by the ECB cut their 2013 growth forecast to 0.6 percent from 1 percent. The Swedish krona fell against the dollar as Finance Minister Anders Borg said the government has room for further stimulus. New Zealand’s dollar weakened after a report showed the nation’s unemployment rate unexpectedly rose to a two-year high last quarter.
“The situation in Europe remains uncertain and the data has been weaker,” said Bernd Berg, a currency strategist at Credit Suisse Group AG’s private banking unit in Zurich. “The euro should go lower.”
The euro declined 0.5 percent to $1.2304 at 7:48 a.m. New York time, and fell 0.5 percent against the yen at 96.46, after rising by as much as 0.3 percent.
New Zealand’s so-called kiwi fell 0.6 percent to 81.12 U.S. cents, and slipped 0.5 percent versus the yen to 63.65.
The nation’s jobless rate increased to 6.8 percent from 6.7 percent in the first quarter, Statistics New Zealand said in a report today in Wellington. The median estimate in a Bloomberg survey was 6.5 percent.
Yen Performance
The yen swung between gains and losses against the dollar, trading between 0.2 percent higher and lower, after the Bank of Japan (8301) refrained from adding stimulus at a policy meeting today. The currency was 0.1 percent stronger at 78.32 per dollar.
The Bank of Japan kept its asset-purchase fund at 45 trillion yen ($574 billion) and lending facility at 25 trillion yen, according to a statement released in Tokyo. All 22 analysts surveyed by Bloomberg News predicted no change.
The Japanese currency has declined 1.2 percent in the past week, the worst performance among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has lost 1.1 percent and the euro has gained 0.1 percent.
The economists surveyed by the ECB forecast the region’s economy will shrink 0.3 percent in 2012, from a 0.2 percent contraction predicted last quarter.
A report tomorrow will show French industrial production fell 1.8 percent in June from a year earlier, according to the median estimate of economists surveyed by Bloomberg before Insee, the statistics office, reports the figures.
“It’s hard to see any upside for the euro at the moment,” said Janu Chan, Sydney-based economist at St. George Bank Ltd. “Economic data has been quite soft. There’s still a bit of uncertainty about what the ECB can do and will do in addressing the crisis.”
Aussie, Krona
The Australian dollar strengthened against most of its 16 major counterparts. The number of people employed in the South Pacific nation rose by 14,000 in July, the statistics bureau said today, exceeding the 10,000 increase predicted by the median economist estimate in a Bloomberg survey. The jobless rate fell to 5.2 percent from a revised 5.3 percent in June.
The Australian jobs data “was, on balance, better than expected,” said Andrew Salter, a currency strategist in Sydney at Australia & New Zealand Banking Group Ltd. (ANZ)
The so-called Aussie added as much as 0.4 percent to $1.0613 before trading at $1.0576.
Sweden’s krona weakened 0.5 percent to 6.7168 per dollar and was little changed at 8.2589 against the euro, after rising yesterday by as much as 1 percent.
Crisis Resistance
The government has scope to invest that’s “slightly bigger” than previously estimated, Borg said at a press briefing in Stockholm today. Sweden has shown “resistance” against the fallout of the euro area’s debt crisis, and long- term spending measures remain an option, Borg said.
Asian currencies strengthened as China reported inflation eased for a fourth month in July, adding to speculation policy makers will take more measures to stimulate growth in the world’s second-biggest economy.
India’s rupee strengthened 0.1 percent to 55.3550 per dollar, according to data compiled by Bloomberg. South Korea’s won appreciated 0.3 percent to 1,125.48 and China’s yuan advanced 0.04 percent to 6.3590.
To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
