Euro Weakens for Fifth Day on Bets ECB Will Cut Rates; Yen Rises:- The euro weakened for a fifth day against the dollar as signs of economic weakness in the single currency bloc fueled speculation the European Central Bank will cut interest rates as soon as next week. The 17-nation currency headed for its biggest weekly decline since February after reports yesterday showed the region’s inflation slowed and unemployment climbed to a record. The yen strengthened against all except one of 16 major counterparts as declines in Asian stocks boosted demand for haven assets. Sweden’s krona fell after a report showed manufacturing expanded less last month than economists forecast. “The euro is being sold as weaker inflation data suddenly put an ECB rate cut back on the table,” said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp. in New York. “For the euro to extend drops, we need to see an actual rate cut in Europe or a slew of strong data out of the U.S.” The euro fell 0.4 percent to $1.3531 at 8:49 a.m. London time, having declined 2 percent this week, the most since the period ended Feb. 8. The shared currency dropped 0.5 percent to 132.88 yen after sliding to 132.61, the lowest since Oct. 11. The yen strengthened 0.2 percent to 98.20 per dollar. Bank of America Corp., UBS AG and Royal Bank of Scotland Plc now forecast a cut a rate cut at this month’s meeting on Nov. 7. BNP Paribas SA, Societe Generale SA, JPMorgan Chase & Co. and Scotiabank predict a reduction in December, when the central bank will publish new economic projections. The ECB last lowered its benchmark rate on May 2 to a record 0.5 percent.
Posted on: Fri, 01 Nov 2013 09:13:21 +0000