BLBG:Euro Falls for Sixth Day Against Dollar Before Inflation Report
The euro weakened for a sixth day against the dollar, the longest losing streak in a year, before a report that economists said will confirm consumer-price inflation in the region was the slowest in three years in April.
The 17-nation currency approached a six-week low on speculation the European Central Bank will have to ease monetary policy further after data yesterday showed the euro-area economy shrank for a record sixth quarter. The dollar strengthened versus most of its major counterparts before a report forecast to show the number of Americans continuing to collect jobless benefits dropped last week. The Australian dollar slid to an 11-month low as commodity prices declined.
“The euro will probably continue its downward trend,” said Junichi Ishikawa, an analyst at IG Markets Securities Ltd. in Tokyo. “Should CPI data confirm low inflation, that would further heighten expectations of an ECB rate cut.”
The euro weakened 0.2 percent to $1.2861 at 8:13 a.m. in London after falling to $1.2843 yesterday, the lowest since April 4. The six-day drop is the longest since May 2012. The single currency declined 0.1 percent to 131.66 yen. The dollar rose 0.1 percent to 102.35 yen after climbing to 102.76 yesterday, the strongest since October 2008.
The euro-area’s annual inflation rate fell to 1.2 percent in April, the least since February 2010, from 1.7 percent the previous month, according to a Bloomberg News survey before today’s report from the European Union’s statistics office. The rate has been below the ECB’s 2 percent ceiling since February.
Economy Contracts
Gross domestic product in the euro area contracted 0.2 percent last quarter, while the German economy grew 0.1 percent, less than the 0.3 percent prediction in a Bloomberg survey, data showed yesterday. ECB President Mario Draghi pledged on May 2 to ease policy again if needed after policy makers cut the benchmark interest rate to record 0.5 percent to spur growth.
The dollar gained versus all except one of its 16 major counterparts before U.S. reports today forecast to show continuing jobless claims declined last week, manufacturing in the Philadelphia region expanded this month and consumer prices fell in April.
To contact the reporters on this story: David Goodman in London at dgoodman28@bloomberg.net; Candice Zachariahs in Sydney at czachariahs2@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
