Euro Declines as Euro-Area Joblessness Rises to Record
Monday, 02 July 2012 | 14:34
The euro fell, snapping its biggest gain versus the yen in more than 15 months, as a report showed euro-area unemployment climbed to a record in May, damping demand for the shared currency.
The euro weakened against all but one of its 16 major peers after jumping the most against the dollar in eight months on June 29 as European leaders eased terms on loans to Spanish banks. The European Central Bank, which has kept borrowing costs at a record-low 1 percent since December, will probably lower the benchmark rate by 0.25 percentage point on July 5, a Bloomberg News survey of economists shows.
Euro Expected to Fall Versus Yen, ECB to Cut Rates
“There was a very good bounce in the euro on Friday but now the market is recognizing the reality,” said Geoff Kendrick, the head of European currency strategy at Nomura International Plc in London. “The ECB meeting is coming up later in the week so the market might be choppy before that.”
The euro dropped 0.6 percent to 100.41 yen at 6:20 a.m. New York time after rising 2.2 percent on June 29, the steepest advance on a closing basis since March 2011. It fell 0.4 percent to $1.2619, after jumping 1.8 percent at the end of last week, the most since Oct. 27. The greenback weakened 0.3 percent to 79.55 yen.
The jobless rate in the euro area rose to 11.1 percent in May from 11 percent in April, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995.
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