The yen fell versus the euro as demand for havens deteriorated. The euro was about 0.3 percent from this year’s low versus the dollar after Germany’s economy contracted last quarter and France’s stagnated.
The common currency halted a three-day drop against the dollar after data showed euro-area gross domestic product in the three months through June was unchanged from the first quarter, when it increased 0.2 percent.
That boosted speculation the European Central Bank will add stimulus to support growth. The pound fell to a four-month low versus the dollar.
“The market is less-averse than it was a week ago as geopolitical tensions seem to have eased, and that reduced demand for safe-haven currencies like the yen,” said Kathleen Brooks, European research director at Forex.com in London.
“The market also focuses on the weak GDP report. While the euro didn’t fall off the cliff as some bad news is already in the price, the weak outlook will weigh on the currency longer-term.”
The yen dropped 0.1 percent to 137.01 per euro as of 7:09 a.m. in New York. Japan’s currency was little changed at 102.43 per dollar after earlier touching 102.66, the weakest level since Aug. 5.
The euro was little changed at $1.3376 after weakening 0.3 percent in the previous three days. It fell to $1.3333 on Aug. 6, the least since Nov. 8.
Aid Compromise
A convoy Russia says is carrying aid resumed its course toward Ukraine, reducing tensions in the conflicted region. The euro region’s inflation rate slowed to the least in almost five years, another report showed.
Ukraine opened the door to a compromise over humanitarian aid arriving on hundreds of trucks from Russia, saying it could accept the supplies if the Red Cross distributed them in the nation’s war-torn eastern regions.
The dispute over the Russian convoy has stoked tensions, prompting the U.S. and the European Union to warn the government in Moscow against using aid as a pretext for a military intervention.
Gross domestic product in Germany, Europe’s largest economy, contracted 0.2 percent in the second quarter, compared with a 0.1 percent decline projected by economists in a Bloomberg News survey. Data earlier showed the French economy, the region’s second-largest, posted zero growth in the same period, compared with a median estimate for a 0.1 percent gain.
Growth Stalls
The European Union’s statistics office said today that growth in the euro-area economy stalled in the second quarter from the previous three months, when it grew 0.2 percent.
The median forecast in a Bloomberg survey of analysts was for growth of 0.1 percent. In a separate report, the agency confirmed the annual inflation rate was 0.4 percent in July.
The ECB cut the deposit rate to minus 0.1 percent and lowered the main refinancing rate to a record 0.15 percent in June.
Policy makers next meet on Sept. 4. “It would seem that the authorities are quite happy with a weaker euro,” said Callum Henderson, Singapore-based global head of foreign-exchange research at Standard Chartered Plc.
“That’s probably what they’ll get anyway because of the weak fundamentals.”
The euro lost 0.5 percent in the past month, according to Bloomberg Correlation-Weighted Indexes that track 10 developed-nation currencies. The yen climbed 0.5 percent in the same period and the dollar gained 1.5 percent.
Pound Slides
Sterling depreciated against all of its 16 major peers as Monetary Policy Committee member David Miles said the bank could keep interest rates at record-low levels for “a bit longer.”
The pound was little changed at $1.6677 after falling to $1.6658, the lowest since April 8, and weakened 0.2 percent to 80.20 pence per euro.
The dollar broke above resistance levels versus the yen, where technical analysts say sell orders may be clustered. “Dollar-yen is looking solid,” said Takuya Kawabata, an analyst at Gaitame.com in Tokyo.
“The pair has broken out of the triangle pattern, so if we see a bottom form around the 102 level, it could extend a little higher. The break above the key resistance at 103 yen, near the highs in May, late July and early August, would be a buy signal.”
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 developed-market peers, was little changed at 1,021.02. The gauge touched 1,024.67 on Aug. 6, matching the highest since Feb. 11.
bloomberg.com
The common currency halted a three-day drop against the dollar after data showed euro-area gross domestic product in the three months through June was unchanged from the first quarter, when it increased 0.2 percent.
That boosted speculation the European Central Bank will add stimulus to support growth. The pound fell to a four-month low versus the dollar.
“The market is less-averse than it was a week ago as geopolitical tensions seem to have eased, and that reduced demand for safe-haven currencies like the yen,” said Kathleen Brooks, European research director at Forex.com in London.
“The market also focuses on the weak GDP report. While the euro didn’t fall off the cliff as some bad news is already in the price, the weak outlook will weigh on the currency longer-term.”
The yen dropped 0.1 percent to 137.01 per euro as of 7:09 a.m. in New York. Japan’s currency was little changed at 102.43 per dollar after earlier touching 102.66, the weakest level since Aug. 5.
The euro was little changed at $1.3376 after weakening 0.3 percent in the previous three days. It fell to $1.3333 on Aug. 6, the least since Nov. 8.
Aid Compromise
A convoy Russia says is carrying aid resumed its course toward Ukraine, reducing tensions in the conflicted region. The euro region’s inflation rate slowed to the least in almost five years, another report showed.
Ukraine opened the door to a compromise over humanitarian aid arriving on hundreds of trucks from Russia, saying it could accept the supplies if the Red Cross distributed them in the nation’s war-torn eastern regions.
The dispute over the Russian convoy has stoked tensions, prompting the U.S. and the European Union to warn the government in Moscow against using aid as a pretext for a military intervention.
Gross domestic product in Germany, Europe’s largest economy, contracted 0.2 percent in the second quarter, compared with a 0.1 percent decline projected by economists in a Bloomberg News survey. Data earlier showed the French economy, the region’s second-largest, posted zero growth in the same period, compared with a median estimate for a 0.1 percent gain.
Growth Stalls
The European Union’s statistics office said today that growth in the euro-area economy stalled in the second quarter from the previous three months, when it grew 0.2 percent.
The median forecast in a Bloomberg survey of analysts was for growth of 0.1 percent. In a separate report, the agency confirmed the annual inflation rate was 0.4 percent in July.
The ECB cut the deposit rate to minus 0.1 percent and lowered the main refinancing rate to a record 0.15 percent in June.
Policy makers next meet on Sept. 4. “It would seem that the authorities are quite happy with a weaker euro,” said Callum Henderson, Singapore-based global head of foreign-exchange research at Standard Chartered Plc.
“That’s probably what they’ll get anyway because of the weak fundamentals.”
The euro lost 0.5 percent in the past month, according to Bloomberg Correlation-Weighted Indexes that track 10 developed-nation currencies. The yen climbed 0.5 percent in the same period and the dollar gained 1.5 percent.
Pound Slides
Sterling depreciated against all of its 16 major peers as Monetary Policy Committee member David Miles said the bank could keep interest rates at record-low levels for “a bit longer.”
The pound was little changed at $1.6677 after falling to $1.6658, the lowest since April 8, and weakened 0.2 percent to 80.20 pence per euro.
The dollar broke above resistance levels versus the yen, where technical analysts say sell orders may be clustered. “Dollar-yen is looking solid,” said Takuya Kawabata, an analyst at Gaitame.com in Tokyo.
“The pair has broken out of the triangle pattern, so if we see a bottom form around the 102 level, it could extend a little higher. The break above the key resistance at 103 yen, near the highs in May, late July and early August, would be a buy signal.”
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 developed-market peers, was little changed at 1,021.02. The gauge touched 1,024.67 on Aug. 6, matching the highest since Feb. 11.
bloomberg.com
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