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Pimco Says Capital Flows Signaling New Storms Threatening Europe

Capital has begun flowing out of the countries sharing the euro, signaling “another storm” may be about to break, according to Thomas Kressin of Pacific Investment Management Co., which manages the world’s biggest bond fund.

The euro has lost 5 percent of its value since the beginning of May on a trade-weighted basis, and about 8 percent against the dollar, according to Kressin, head of European foreign exchange at Pimco in Munich. That contrasts with earlier crisis periods when the euro held steady as capital flowed from peripheral nations into the core, Kressin said in a posting on the company’s website.