The euro held a two-day decrease against the dollar before data this week that analysts said will show the 17-nation currency bloc’s economy contracted for a sixth consecutive quarter in the three months through March.
The shared currency was little changed after rising to the highest level in more than three years versus the yen before euro-area finance ministers meet in Brussels today.
The dollar rose versus 11 of its 16 major peers after benchmark 10-year Treasury yields climbed to the most in seven weeks.
The head of currency strategy at Canadian Imperial Bank of Commerce in London, Jeremy Stretch, stresses the fact that the euro is vulnerable and says that they are going to see growth numbers which are likely to be fairly disappointing. They expect more weakness in the euro, and see it trading below $1.25 towards the end of this year.
The euro was little changed at $1.2985. After rising to 132.40 it fell 0.1 percent to 131.89 yen. The Japanese yen after falling to 102.15 was changed at 101.58 per dollar, which is the weakest level since October 2008.
According to Charles Plosser, President of Federal Reserve Bank of Philadelphia, U.S. unemployment will probably decrease by to 7 percent at the end of 2013, and he would favor reducing the Fed’s $85 billion monthly pace of bond-buying next month.
The data of Washington-based Commodity Futures Trading Commission showed last week that futures traders increased their wagers, and that the yen will decline against the U.S. dollar. The difference in the number of wagers by hedge funds and other large speculators on a decline in the yen as compared with those on an increase was 78,560 on May 7, and 71,127 a week earlier.
Today the National Australia Bank Ltd. announced that its index of business confidence in the South Pacific nation fell to minus 2 in April, the lowest since November. The nation’s central bank lowered interest rates to a record-low 2.75 percent on May 7. Aussie fell 0.5 percent to 99.72 U.S. cents after touching 99.54, the weakest since June 14.
Source: Bloomberg News