Euro Near Week Low Versus Dollar Before Sentiment Report

By Kristine Aquino and Monami Yui - Sep 25, 2012 10:32 AM GMT+0800

The euro was 0.4 percent from its lowest in more than a week before reports that may show Europe’s debt crisis is hurting sentiment in the region. 

The 17-nation euro failed to rally after a five-day drop against the yen before data forecast to show French business confidence worsened. Other reports due today may show consumer sentiment in Germany and Italy stagnated. The yen was less than 0.1 percent from a one-week high versus the dollar as Asian stocks were little changed after declining yesterday, spurring demand for Japan’s currency as a refuge.

“We’ve got no signs of a pickup or improvement in the euro zone,” said Ray Attrill, Sydney-based global co-head of currency strategy at National Australia Bank Ltd. “Sentiment is probably going to keep the euro a little bit heavy.”
The euro was at $1.2947 at 11:24 a.m. in Tokyo from $1.2931 yesterday, when it dropped to as low as $1.2891, the least since Sept. 13. It bought 100.78 yen from 100.67. The yen fetched 77.84 per dollar after reaching 77.81 yesterday, the strongest since Sept. 14.

The MSCI Asia Pacific Index of equities was little changed after falling 0.3 percent yesterday. The Standard & Poor’s 500 Index (SPX) dropped 0.2 percent in New York. The Stoxx Europe 600 Index slid 0.4 percent.
Discord has widened over how to stem Europe’s fiscal woes, with disagreement on the establishment of a banking union, Spain’s indecision on whether it needs a full rescue and discussions in Greece on how to meet bailout commitments.

Losing Urgency

Michael Meister, finance spokesman for German Chancellor Angela Merkel’s Christian Democratic Union, said yesterday Spanish Prime Minister Mariano Rajoy must stop prevaricating. European Union President Herman Van Rompuy warned against “losing the sense of urgency” in fighting the crisis three years after it erupted in Greece, speaking in a video posted on his website yesterday.

French industrial confidence probably fell to 89 this month from 90 in August, according to the median estimate of economists surveyed by Bloomberg News before the national statistics office Insee releases the report today. That would match the figure reached in July, which was the lowest since February 2010.
Data due for publication today by market research company GfK SE (GFK) will probably say consumer sentiment in Germany will be unchanged at 5.9 in October, the median forecast in a separate poll showed. Confidence in Italy is estimated to remain at 86 this month, according the median projection of economists in another survey.

Second Worst

The euro dropped 3.3 percent in the past six months, the worst performance after the Swiss franc among the 10 developed- nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen was the biggest gainer, rising 5.9 percent. The dollar lost 0.6 percent.
Japan is preparing to appoint the country’s fifth finance minister in three years after Prime Minister Yoshihiko Noda yesterday named current Finance Minister Jun Azumi acting secretary-general of the ruling Democratic Party of Japan. Azumi will keep his post for the time being, Noda said.

Azumi told reporters today speculation that a change his ministry’s leadership will lead to a vacancy in currency policy is mistaken. The yen may become volatile, but over the mid- to long-term, the Bank of Japan (8301)’s easing will have an effect on the currency, Azumi said.
Japan’s central bank unexpectedly increased its asset- purchase fund to 55 trillion yen ($707 billion) at its meeting last week.

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