Euro Declines as Weak Data Fuel ECB Rate-Cut Bets; Krona Slides

The euro fell to a two-week low against the dollar as a report showed weakening services and manufacturing in the region, adding to speculation the European Central Bank will lower interest rates to spur economic growth.

The yen erased gains versus the dollar as risk appetite improved on chances for a rate cut. The euro dropped against most of its major counterparts as a German purchasing-manager index unexpectedly fell after the Bundesbank said yesterday the nation’s recovery may be delayed. Sweden’s krona slid after the nation’s jobless rate unexpectedly increased.