Euro Approaches 2-Year Low on French, Italian Production Concern
The euro declined to within 0.4 percent of its lowest level in two years versus the dollar as industrial production shrank in France and was forecast to fall in Italy as Europe’s debt crisis undermined growth.
Europe’s 17-nation currency weakened most against the yen among its 16 major peers after European Union Economic and Monetary Affairs Commissioner Olli Rehn said Spain will soon have to take additional measures soon to meet budget targets. The dollar strengthened versus most of its most traded counterparts as Asian stocks declined. Australia and New Zealand’s currencies dropped after data showed growth in exports and imports slowed in China.
“The euro is going to stay quite weak, particularly against the U.S. dollar and the yen,” said Joseph Capurso, a strategist in Sydney at Commonwealth Bank of Australia (CBA), the nation’s biggest lender. “The euro zone is still in recession and it’s probably getting even deeper.”
The euro lost 0.1 percent to $1.2297 at 8:15 a.m. London time after sliding to as low as $1.2251 yesterday, the weakest since July 2010. The shared currency fell 0.3 percent to 97.62 yen. It touched 97.43 yesterday, the least since June 5.
French output fell 1.9 percent from a month earlier, Insee, the Paris-based statistics office, said today. April’s production increase was revised down to 1.4 percent. Economists had forecast a decline of 1 percent in May, according to the median estimate of 21 forecasts in a Bloomberg News survey.
The dollar slid 0.2 percent to 79.40 yen. The so-called Aussie dropped 0.2 percent to $1.0187, while the New Zealand currency weakened 0.2 percent to 79.46 U.S. cents.
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