Euro Near 2-Week Low; Italy Retail Data May Signal Slump

By Kristine Aquino and Monami Yui - Sep 26, 2012 7:35 AM GMT+0800

The euro was 0.1 percent from the lowest level in almost two weeks as weakening economic data and political uncertainty in the currency bloc underscored the deepening impact of the debt crisis.

The 17-nation euro remained lower after completing a six- day slide versus the yen yesterday before a report that may show a decline in Italian retail sales. The yen traded 0.2 from its strongest in more than one week versus the dollar amid demand for safer assets as Spanish Prime Minister Mariano Rajoy faces calls for early elections, which may spur a constitutional crisis in the midst of a recession.

“Recent data suggest that the European economy is likely to remain weak for a long time,” said Hitoshi Asaoka, a senior strategist at Mizuho Trust & Banking Co. in Tokyo. “We’re not sure whether Spain is really going to ask for bailout, weighing on the euro.”

The euro was little changed at $1.2901 at 8 a.m. in Tokyo from $1.2899 yesterday, when it dropped to $1.2887, the least since Sept. 13. It bought 100.38 yen from 100.36 in New York, where it completed a 2.8 percent six-day slide, the longest stretch since May 31. Japan’s currency was unchanged at 77.80 per dollar. It reached 77.66 yesterday, the strongest since Sept. 14
In Italy, retail sales probably fell 0.8 percent in July from a year ago, a Bloomberg News poll showed before today’s report. That compares with a 0.5 percent drop in June and would be the fourth-straight period of decline.

To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net