Euro Falls as Trichet Says Currency Moves Have ‘Adverse’ Effect

By Matthew Brown and Ye Xie

Oct. 1 (Bloomberg) -- The euro fell against the dollar after European Central Bank President Jean-Claude Trichet said “disorderly movements” in exchange rates have “adverse implications” for economies.
“ECB and EU officials have been trying to talk up the dollar all this week,” said Daragh Maher, deputy head of global foreign exchange at Calyon, the investment-banking unit of Credit Agricole SA. “The losses didn’t extend because people are questioning if they will actually do anything.”

The euro decreased 0.7 percent to $1.4532 at 8:35 a.m. in New York, from $1.4640 yesterday. The 16-nation currency traded at 130.72 yen, compared with 131.33. The yen weakened to 89.96 per dollar, from 89.70.

The nations that use the euro have a “shared interest in a strong and stable international financial system, and excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability,’’ Trichet said at a meeting of euro-area finance ministers in Gothenberg, Sweden, before the Group of Seven meeting in Istanbul on Oct. 3.

The euro also fell as Germany’s Federal Statistics Office said retail sales, adjusted for inflation and seasonal swings, decreased 1.5 percent in August. The median forecast of analysts in a Bloomberg survey was for a 0.2 percent gain.

U.S. consumer spending climbed 1.3 percent in August, after rising a revised 0.3 percent in July, the Commerce Department said today in Washington. The median forecast of 80 economists surveyed by Bloomberg News was for an increase of 1.1 percent.

The number of Americans filing first-time claims for jobless benefits rose to 551,000 in the week ended Sept. 26, from 534,000 in the previous week, the Labor Department said today in Washington. The median forecast of analysts surveyed by Bloomberg was for an increase to 535,000 from a previously reported 530,000.

To contact the reporters on this story: Matthew Brown in London at mbrown42@bloomberg.net
Last Updated: October 1, 2009 08:40 EDT