The euro declined for a fifth day against the yen after a European report showed the region’s economy contracted last quarter, adding to signs the debt crisis is hampering growth.
The 17-nation currency dropped to a two-week low versus the dollar as investors debated whether to accept the conditions of a Greek bond swap under its private-sector involvement plan. The yen and dollar strengthened against higher-yielding currencies as stocks fell around the world, spurring demand for safer assets. Australia’s dollar weakened for a third day after the central bank said there’s scope to cut interest rates.
The euro slid 1.3 percent to 106.42 yen at 7:01 a.m. in New York, extending its decline in the past week to 1.7 percent. The common currency fell 0.6 percent to $1.3134 after dropping to $1.3131, the lowest level since Feb. 17. The dollar slipped 0.7 percent to 81.03 yen.
Europe’s gross domestic product shrank 0.3 percent from the third quarter, the region’s statistics office said today, confirming an initial estimate published on Feb. 15. Exports fell 0.4 percent and household spending declined 0.4 percent. The ECB will keep its benchmark interest rate at a record low 1 percent on March 8.
The Dollar Index last rose above 80 on Feb. 16, when it reached 80.119, the highest level since Jan. 25.
Australia's dollar fell to a five-week low after the central bank left its benchmark rate at 4.25 percent and reiterated it has scope to ease monetary policy if needed. (Bloomberg)
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