Sun, Aug 12, 2012 - Page 15 News List

Euro falls on signs of slowing global economic growth

REFUGE:Norway’s krone was the biggest winner this week, as investors favored economies with strong fundamentals. Oil lifted the Canadian dollar

Bloomberg

The euro declined versus the US dollar for the first time in three weeks as signs of slowing global economic growth added to concern Europe’s sovereign-debt crisis was worsening, dampening appetite for riskier assets.

The yen rose against the euro as investors sought haven after China’s export growth collapsed, while economists forecast data would show the eurozone’s economy shrank for a second straight quarter. The Canadian dollar gained versus most of its peers as oil climbed for a second week.

“Risk-on was a little stronger in the beginning of the week following the previous week’s comments out of Europe,” Brian Kim, a currency strategist at Royal Bank of Scotland’s securities unit in Stamford, Connecticut, said on Friday in a telephone interview. “Reality set in that it’s all about the implementation. After the soft China data, people probably put things into neutral and maybe reversed a bit heading into the weekend.”

The 17-nation currency declined 0.8 percent to US$1.2289 this week in New York in its first loss since the five days ended July 20. The euro depreciated versus the yen for the first time in three weeks, falling 1.1 percent to ¥96.17. Japan’s currency rose 0.2 percent to ¥78.28 per US dollar.

Norway’s krone was the biggest winner among major currencies. It climbed 1.8 percent to 7.2702 per euro and touched 7.2502, the strongest since January 2003. The currency advanced 1.1 percent to 5.9149 per US dollar.

The Swedish krona reached the highest level versus the shared currency in 12 years. It touched 8.1784 per euro on Friday, the strongest since June 2000. For the week, it appreciated 1.5 percent to 8.1821, and rose 0.7 percent to 6.6575 per US dollar.

“There’s a lot of focus on these currencies as safe havens with strong fundamentals,” Niels Christensen, chief currency strategist at Nordea Bank AB in Copenhagen, said by telephone on Wednesday. “There’s a double effect of demand for these currencies and a weak euro.”

Canada’s dollar strengthened versus the greenback for a fifth straight week, the longest winning streak since October 2010, amid an increase in crude oil, the nation’s biggest export.

The currency, nicknamed the loonie for the image of the waterfowl on the one-dollar coin, gained 1 percent to US$0.9911.

The pound advanced for the first time in three weeks against the euro after Bank of England Governor Mervyn King said cutting UK interest rates might be counterproductive. It reached the highest this month against the US dollar after King’s comments dampened speculation policymakers would reduce borrowing costs to spur growth.

The pound gained 1.1 percent over the week to £0.7836 per euro at 4:30pm in London on Friday. It climbed 0.3 percent to US$1.5679.

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