Dollar falls for third week against euro

Bloomberg

Sun, Dec 02, 2012 - Page 15

The US dollar fell for a third week against the euro, its longest string of losses in two months, as US lawmakers engaged in a budget showdown that may push the world’s biggest economy into recession.

The euro was buoyed as EU finance ministers agreed on the terms for Greece to receive its next aid payment. The yen fell against most of its major counterparts, as Japan’s consumer prices excluding fresh food stagnated, adding to political calls for the central bank to add to monetary easing at the Dec. 20 meeting.

“The most relevant driver of foreign-exchange markets these last five days has been policy developments,” Nick Bennenbroek, head of currency strategy at Wells Fargo & Co in New York, said in a telephone interview. “On the US, it has been more uneven. Policymaker progress has been uneven, and you can use that and encapsulate the yen, as well. In Europe, they took a step or two forward this week.”

The US dollar declined 0.1 percent to US$1.2986 per euro this week in the longest losing skid since Sept. 14. The greenback dropped 0.2 percent last month, its fourth consecutive monthly loss. The euro rose 0.2 percent to ¥107.11, touching ¥107.67 on Friday, its strongest level in seven months. It gained 3.6 percent on the month. The yen fell 0.1 percent to ¥82.48 against the US dollar, extending its monthly decline to 3.3 percent.

The pound fell for a third week versus the euro, touching the lowest level in more than a month, as bets European policymakers were taking steps to stem the debt crisis dampened demand for the safety of UK assets. Sterling was little changed against the US dollar after a report showed GDP rose 1 percent in the third quarter, matching an earlier estimate.

Sterling’s decline against the euro is “a function of improving short-term European sentiment over Greece,” said Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank in London.

Sweden’s krona dropped 0.6 percent to 6.6608 per US dollar and fell 0.7 percent to 8.6506 versus the euro, after consumer confidence fell for a fourth month and as the economy expanded less than the previous quarter.