The euro weakened for a third day versus the dollar, reaching a one-month low, as traders added to bets the European Central Bank will reduce interest rates, decreasing the appeal of the region’s assets.
The 16-nation currency also declined to the lowest level in more than a month against the yen after Standard & Poor’s said it may cut Spain’s credit rating. German Chancellor Angela Merkel’s coalition said yesterday it will spend 50 billion euros ($66.6 billion) to support Europe’s largest economy. New Zealand’s dollar fell to a four-week low after S&P said it may cut the country’s foreign-currency credit rating.
“There is more than enough room for the euro to fall further,” said Hideki Amikura, deputy general manager of foreign exchange in Tokyo at Nomura Trust and Banking Co., a unit of Japan’s largest brokerage. “The focus of the currency market is how far rates will fall in Europe, because the ECB is behind the curve compared with other central banks.”
The euro traded at $1.3257 as of 7:47 a.m. in London from $1.3362 yesterday in New York. It touched $1.3228, the lowest level since Dec. 11. The euro fell to 117.71 yen, the lowest since Dec. 8, before trading at 118.15 yen from 119.19 yen yesterday. The dollar traded at 89.12 yen from 89.22 yen. It fell to 88.88 yen yesterday, the weakest level since Dec. 19.
The euro may decline to $1.25 by next week, Amikura said.
From Bloomberg News.
The 16-nation currency also declined to the lowest level in more than a month against the yen after Standard & Poor’s said it may cut Spain’s credit rating. German Chancellor Angela Merkel’s coalition said yesterday it will spend 50 billion euros ($66.6 billion) to support Europe’s largest economy. New Zealand’s dollar fell to a four-week low after S&P said it may cut the country’s foreign-currency credit rating.
“There is more than enough room for the euro to fall further,” said Hideki Amikura, deputy general manager of foreign exchange in Tokyo at Nomura Trust and Banking Co., a unit of Japan’s largest brokerage. “The focus of the currency market is how far rates will fall in Europe, because the ECB is behind the curve compared with other central banks.”
The euro traded at $1.3257 as of 7:47 a.m. in London from $1.3362 yesterday in New York. It touched $1.3228, the lowest level since Dec. 11. The euro fell to 117.71 yen, the lowest since Dec. 8, before trading at 118.15 yen from 119.19 yen yesterday. The dollar traded at 89.12 yen from 89.22 yen. It fell to 88.88 yen yesterday, the weakest level since Dec. 19.
The euro may decline to $1.25 by next week, Amikura said.
From Bloomberg News.