Euro Gains Second Week as Fed Bets Pared: Aussie Drops on China

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The euro rose toward its second weekly gain against the dollar as Greece prepared for elections and traders cut bets on a U.S. interest-rate increase next month.

The single currency outperformed all except two major peers this week after Greek Prime Minister Alexis Tsipras announced he will step down and call snap elections to quell a party rebellion against the conditions tied to a rescue package. The Aussie tumbled after a report indicated Chinese manufacturing will be weaker than expected this month.

“The euro may be gaining more than other currencies from the reduction in expectations of Fed tightening,” Sean Callow, a strategist at Westpac Banking Corp. in Sydney, wrote in a note to clients on Friday.

The euro fetched $1.1249 as of 10:57 a.m. in Tokyo, after climbing 2 percent in the last two days to $1.1242 Thursday. The 19-nation currency has surged 2.4 percent since Aug. 7.

The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 major peers, was little changed at 1,204.96, following a 0.6 percent decline in the last two days. The gauge has slipped 0.3 percent since Aug. 14, set for its second weekly loss.

Australia’s currency slid 0.6 percent to 72.91 U.S. cents after the preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics was reported at 47.1 for August, compared with a median estimate of 48.2. That’s the lowest level in more than six years for the gauge.