By Kristine Aquino and Monami Yui -
Oct 3, 2012 11:36 AM GMT+0800
The euro was 0.8 percent from a
three-week low as signs of economic weakness in Europe add
pressure on central bank policy makers meeting this week to
consider fresh easing steps.
The 17-nation euro ended a four-day gain against the yen before data that may show retail sales in the region had the first consecutive monthly drop this year. European Central Bank and Bank of England officials are due to meet tomorrow. The pound held losses against the common currency before figures forecast to show U.K. services expanded at a slower pace. The yen stayed lower against the dollar with the Bank of Japan (8301) also preparing for a two-day meeting. Australia’s dollar sank after data showed the nation’s trade deficit was wider than forecast.
“The European economy looks worse than expected,” said Hitoshi Asaoka, a senior strategist at Mizuho Trust & Banking Co. in Tokyo. “Investors are reluctant to keep buying the euro after it reached $1.30,” Asaoka said, referring to a level last seen on Sept. 24.
The euro slid 0.2 percent to $1.2901 at 12:25 p.m. in Tokyo from the close yesterday in New York. It touched $1.2804 on Oct. 1, the lowest since Sept. 11. Europe’s shared currency traded at 100.88 yen from 100.97. The yen fetched 78.20 per dollar, 0.1 percent below the close in New York. The pound was at 79.99 pence per euro from 80.09 yesterday, when it lost 0.2 percent.
Retail sales in the euro area probably declined 0.1 percent in August from July when they fell 0.2 percent, according to the median estimate of economists surveyed by Bloomberg News before the European Union’s statistics office releases the data today. That would be the first back-to-back drop since the period ended December 2011.
UBS AG Chairman and former ECB Governing Council member Axel Weber said yesterday in Moscow that the euro region’s festering debt crisis will “continue to linger” as the central bank fails to ease market disquiet and volatility.
The euro weakened 4.9 percent in the past 12 months, according to Bloomberg Correlation Weighted Indexes. The yen declined the most among the 10 developed-nation currencies tracked by the gauge, falling 6.7 percent in the period. The dollar lost 3 percent.
Japan’s new Economy Minister Seiji Maehara this week pledged a closer watch over the BOJ to ensure it meets its target for consumer prices, adding that purchases of foreign bonds may be a powerful tool for easing.
In the U.K., a gauge of services based on a survey of purchasing managers was at 53 last month after climbing to 53.7 in August, the median projection in a Bloomberg survey showed before Markit Economics and the Chartered Institute of Purchasing and Supply publish the report today.
The BOE will probably keep its target for bond purchases at 375 billion pounds ($605 billion) at their meeting tomorrow, all 40 economists said in a separate Bloomberg poll.
Government data in Australia today showed the nation’s August trade deficit was three times the median economist estimate. The so-called Aussie sank 0.4 percent to $1.0222.
“The Reserve Bank will cut again probably next month,” said Joseph Capurso, a strategist at Commonwealth Bank of Australia (CBA) in Sydney. “I don’t think the RBA will cut as much as the market is expecting, but those expectations have been one thing that has pushed the Aussie down.”
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
The 17-nation euro ended a four-day gain against the yen before data that may show retail sales in the region had the first consecutive monthly drop this year. European Central Bank and Bank of England officials are due to meet tomorrow. The pound held losses against the common currency before figures forecast to show U.K. services expanded at a slower pace. The yen stayed lower against the dollar with the Bank of Japan (8301) also preparing for a two-day meeting. Australia’s dollar sank after data showed the nation’s trade deficit was wider than forecast.
“The European economy looks worse than expected,” said Hitoshi Asaoka, a senior strategist at Mizuho Trust & Banking Co. in Tokyo. “Investors are reluctant to keep buying the euro after it reached $1.30,” Asaoka said, referring to a level last seen on Sept. 24.
The euro slid 0.2 percent to $1.2901 at 12:25 p.m. in Tokyo from the close yesterday in New York. It touched $1.2804 on Oct. 1, the lowest since Sept. 11. Europe’s shared currency traded at 100.88 yen from 100.97. The yen fetched 78.20 per dollar, 0.1 percent below the close in New York. The pound was at 79.99 pence per euro from 80.09 yesterday, when it lost 0.2 percent.
Retail sales in the euro area probably declined 0.1 percent in August from July when they fell 0.2 percent, according to the median estimate of economists surveyed by Bloomberg News before the European Union’s statistics office releases the data today. That would be the first back-to-back drop since the period ended December 2011.
ECB Meets
ECB officials meet tomorrow in Frankfurt, where they are expected to keep the bank’s benchmark interest rate unchanged at a record-low 0.75 percent, a Bloomberg poll shows. ECB President Mario Draghi unveiled a program of unlimited bond purchases last month to ease borrowing costs for debt-ridden nations.UBS AG Chairman and former ECB Governing Council member Axel Weber said yesterday in Moscow that the euro region’s festering debt crisis will “continue to linger” as the central bank fails to ease market disquiet and volatility.
The euro weakened 4.9 percent in the past 12 months, according to Bloomberg Correlation Weighted Indexes. The yen declined the most among the 10 developed-nation currencies tracked by the gauge, falling 6.7 percent in the period. The dollar lost 3 percent.
BOJ Bets
The yen held a three-day decline against the dollar before the BOJ begins its policy meeting tomorrow. Officials expanded the central bank’s asset-purchase program last month in a bid to stimulate growth and achieve a 1 percent inflation goal.Japan’s new Economy Minister Seiji Maehara this week pledged a closer watch over the BOJ to ensure it meets its target for consumer prices, adding that purchases of foreign bonds may be a powerful tool for easing.
In the U.K., a gauge of services based on a survey of purchasing managers was at 53 last month after climbing to 53.7 in August, the median projection in a Bloomberg survey showed before Markit Economics and the Chartered Institute of Purchasing and Supply publish the report today.
The BOE will probably keep its target for bond purchases at 375 billion pounds ($605 billion) at their meeting tomorrow, all 40 economists said in a separate Bloomberg poll.
Government data in Australia today showed the nation’s August trade deficit was three times the median economist estimate. The so-called Aussie sank 0.4 percent to $1.0222.
China Economy
In China, data today showed the nation’s non-manufacturing industries expanded at the weakest pace since at least March 2011, fanning speculation the Reserve Bank of Australia will lower interest rates again following a quarter-point reduction yesterday. China is Australia’s biggest trading partner.“The Reserve Bank will cut again probably next month,” said Joseph Capurso, a strategist at Commonwealth Bank of Australia (CBA) in Sydney. “I don’t think the RBA will cut as much as the market is expecting, but those expectations have been one thing that has pushed the Aussie down.”
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
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