Reuters: US Dollar Report: FOREX-U.S. dollar falls vs euro, yen on economic worries

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FOREX-U.S. dollar falls vs euro, yen on economic worries Apr 30th 2013, 14:41 Tue Apr 30, 2013 10:41am EDT * U.S. growth worries resurface after recent weak data * Fed begins two-day meeting, expected to keep loose policy * Euro zone data boosts odds of ECB rate cut By Wanfeng Zhou NEW YORK, April 30 (Reuters) - The dollar fell against the euro and yen on Tuesday after a U.S. Midwest business barometer unexpectedly contracted in April, adding to worries about the economic recovery. Business activity in the U.S. Midwest unexpectedly shrank in April to its lowest level since September 2009, according to the ISM-Chicago Business Survey. It followed weaker-than-expected U.S. first-quarter economic growth data released last week. That helped the euro regain strength after falling earlier on disappointing euro zone economic data, which boosted expectations the European Central Bank will lower interest rates at a policy meeting this week. "People are worrying about the U.S. economy again," said Ronald Simpson, managing director of global currency analysis at Action Economics in Tampa, Florida. The euro rose as high as $1.3168, according to Reuters data, and was last at $1.3166, up 0.5 percent on the day. Gains in the single currency accelerated at around 9:38 a.m. EDT. The Chicago PMI is released to subscribers via conference call about 3 minutes before the public release of the data at 9:45. The dollar fell 0.5 percent to 97.30 yen, having fallen as low as 97.20 yen earlier. The Fed kicks off its two-day policy meeting on Tuesday and investors are watching to see if a sluggish recovery and slowing inflation could not only end talk of tapering its bond-buying but push the central bank into buying more assets. "We are currently seeing significant dollar weakness... reason for this is mainly speculation on further Fed quantitative easing policy," said Ulrich Leuchtmann, head of FX research at Commerzbank. "The view that the Fed would scale down QE is coming more and more under question due to poor U.S. data." The ECB meets on Thursday, with a narrow majority of economists expecting a 25 basis point cut, according to a Reuters poll. Inflation in the euro zone hit a three-year low and unemployment rose to a record high, data showed on Tuesday. Adding to worries, German retail sales unexpectedly fell in March while Spain's economy shrank for the seventh straight quarter in the first three months of the year. The dollar index, which measures its value against a basket of six major currencies, earlier hit its lowest since the end of February at 81.6. It was last down 0.6 percent to 81.685. Link this Share this Digg this Email Reprints

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