Euro Slides After DJ Reports Weidmann Says ECB May Reduce Rates
The euro extended losses versus the dollar and yen after Dow Jones reported Bundesbank President Jens Weidmann said the European Central Bank may cut interest rates if new information warrants the move.
The dollar strengthened versus most major peers as a decline in stocks boosted haven demand. The yen declined for a second day against the dollar amid speculation Japan will escape censure over its weak currency at a Group-of-20 meeting this week. Sweden’s krona slid the most since 2011 against the greenback after the Riksbank delayed interest-rate increases.
“Sometimes you get a bit of complacency, but these comments underscore and remind people that more accommodation could be coming from the ECB,” Brian Kim, a currency strategist at Royal Bank of Scotland’s RBS Securities unit in Stamford, Connecticut, said in a telephone interview. “It shows that people need to be on guard because the fundamental situation still isn’t great in the euro zone.”
The 17-nation currency fell 1 percent to $1.3043 at 10:46 a.m. New York time after touching $1.3202 yesterday, the strongest level since Feb. 25. The yen weakened 0.2 percent to 97.71 per dollar after declining earlier as much as 0.9 percent. The Japanese currency rallied 3 percent in the previous two sessions. It lost 0.8 percent to 127.46 yen.
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