The U.S. currency snapped a three-day gain versus the euro and slid against the Norwegian krone and the Australian dollar. The euro-area economy emerged from its worst recession since World War II in the third quarter, fueled by exports from France and Germany, a report showed today. The pound rose as a planned merger between British Airways Plc and Iberia Lineas Aereas de Espana SA spurred speculation the economy is improving.
“There was a fear that the third-quarter recovery in Europe would not go through,” said Ulrich Leuchtmann, head of currency strategy at Commerzbank AG in Frankfurt. “Numbers coming at or around expectations are a good sign for the euro.”
The U.S. currency weakened to $1.4890 per euro as of 6:12 a.m. in New York, from $1.4850 yesterday, headed for its second weekly decline. The dollar depreciated to 89.84 yen, from 90.37 yen. Japan’s currency rose to 133.77 per euro, from 134.21.
The dollar slid 0.8 percent to 5.6205 kroner, and the Australian dollar gained 0.7 percent to 92.96 U.S. cents. Sterling increased 0.6 percent to $1.6675. The Dollar Index, which tracks the greenback against the currencies of six major trading partners, declined 0.3 percent to 75.389.
Gross domestic product in the euro region rose 0.4 percent from the second quarter, when it fell 0.2 percent, the European Union’s statistics office in Luxembourg said today. Economists had predicted growth of 0.5 percent, according to the median of 34 estimates in a Bloomberg survey. German GDP expanded 0.7 percent in the third quarter and French growth was 0.3 percent, separate reports showed.
Interest Rates
The European Central Bank has kept its benchmark interest rate at 1 percent since May and is lending banks unlimited cash for up to a year to haul Europe out of the recession. ECB President Jean-Claude Trichet signaled Nov. 5 the policy makers’ December offer of 12-month loans to banks may be their last.
Benchmark interest rates are 3.5 percent in Australia and 2.5 percent in New Zealand, making assets in those countries more attractive than in the U.S., where the key rate is as low as zero, and in Japan, where the rate is 0.1 percent.
The Reuters/University of Michigan preliminary index of U.S. consumer sentiment for this month may rise to 71 from 70.6 in October, according to the median estimate of economists surveyed by Bloomberg.
‘Destabilizing Factors’
Asia-Pacific leaders said the withdrawal of economic stimulus packages is all about timing.
“A comprehensive world recovery still faces many uncertainties and destabilizing factors,” China’s President Hu Jintao told a gathering of business executives in Singapore today. “We should turn the crisis into an opportunity and lay a solid foundation for the full recovery.”
Asia will lead the rebound, followed by the U.S. and Europe, International Monetary Fund Managing Director Dominique Strauss-Kahn said at the same meeting.
New Zealand’s dollar advanced 0.6 percent to 73.71 U.S. cents, headed for a second consecutive weekly advance.
The nation’s house prices increased 1.3 percent in October from September, the Auckland-based Real Estate Institute of New Zealand Inc. said today in a statement, citing an index. Prices have surged 9.4 percent since hitting a three-year low in January.
“Overall risk sentiment is strong, holding up demand for the euro and commodity currencies,” said Yoh Nihei, trading group manager at Tokai Tokyo Securities Co. in Tokyo.
To contact the reporters on this story: Anna Rascouet in London at arascouet@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
Last Updated: November 13, 2009 06:51 EST
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