Reuters: US Dollar Report: FOREX-Euro falls on weak euro zone PMI, German Ifo

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

FOREX-Euro falls on weak euro zone PMI, German Ifo Oct 24th 2012, 08:34 Wed Oct 24, 2012 4:34am EDT * Euro falls on weak euro zone PMI, German Ifo data * Hits one-week low versus dollar * Euro drop helps dollar index to 2-week high * Yen steadies but stays weak, Australian dollar gains By Jessica Mortimer LONDON, Oct 24 (Reuters) - The euro fell to a one-week low against the dollar on Wednesday as data showed business activity in the euro zone slowing more than expected, while German business sentiment slid more than forecast. Provisional purchasing managers (PMI) surveys pointed to a deepening euro zone downturn, with growth slowing in Germany and France as well as in smaller peripheral countries as euro zone business activity suffered its worst month since mid-2009. The latest German Ifo survey was also weak, with the business climate index unexpectedly falling to 100.00. The euro lost 0.4 percent to $1.2929, dropping below Tuesday's low of $1.2952 to take it well below the peak of $1.3140 hit early last week. Its falls helped push the dollar index, which measures the dollar's value against a basket of currencies, to a two-week high of 80.112. "I can't see where southern Europe is going to get the growth from that it needs to meet its fiscal targets," said Niels Christensen, currency strategist at Nordea in Copenhagen. "Investors are not very happy to put on long euro positions because of the uncertainty in Spain and worries about the euro zone economy." He said any move higher in the euro would be short-lived, adding he expected it to trade well below $1.30 in three to six months time. The euro has gained recently on expectations Spain will apply for a bailout, allowing the European Central Bank to buy its bonds. But any gains have been hampered by uncertainty about when it will do this. Weak euro zone PMIs offset earlier data out of China, which signalled a strengthening economic recovery as the PMI index climbed to a three-month high of 49.1 in October. Enthusiasm about the data was muted, however, as the index remained below the 50 level that separates growth from contraction. Later on Wednesday, investors will turn their focus to the U.S. Federal Reserve's policy statement due at 1815 GMT. The Fed appears intent to stick to its bond-buying stimulus, having already indicated it would take more than a modest show of economic strength for policymakers to begin taking their foot off the gas. YEN STAYS WEAK The dollar edged lower against the yen but stayed close to a three-month high as the prospect of more Bank of Japan monetary easing being announced at a policy meeting on Oct. 30 weighed on the Japanese currency. Further progress for the dollar was hampered, however, by reported heavy demand to sell it above 80 yen, traders said. The dollar was down 0.2 percent at 79.68 yen, having hit a high of 80.02 yen. Although some traders have begun reducing their bullish bets on the dollar against the yen this week, others who missed out on the recent move seem to be looking for chances to buy, said a trader for a major Japanese bank in Singapore. The trader cited a mixture of dollar buying orders and stop-loss sell offers at levels around 79.50 yen. Elsewhere, the Australian dollar rose 0.4 percent to $1.0301 as traders trimmed back bets for its central bank to cut interest rates next month. Data showed Australian consumer prices rose a surprisingly large 1.4 percent last quarter, prompting the market to scale back bets that Australia's central bank will lower interest rates at its next policy meeting in November. (Additional reporting by Masayuki Kitano in Singapore/editing by Chris Pizzey, London MPG Desk, +44 (0)207 542-4441) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions