"It's clear that the euro-region economy is struggling and is some way from reaching a trough," said Adrian Cunningham, who helps oversee PD20 billion (US$28 billion) at Abbey National Asset Managers in Glasgow. "The path of the euro is mirroring the fact that we need a policy response, but the central bank is acting like a rabbit caught in headlights."
The euro fell 4.9 percent against the dollar and 8 percent against the yen in May, and is trading about 1 cent below where the European Central Bank first bought euros Sept. 22 last year to bolster the currency.
Yesterday it had its biggest one-day decline against the dollar since April 10 after the ECB damped speculation it would intervene to support the currency. Wim Duisenberg, the bank's president, said the euro exchange rate ``is not a target for us'' because it isn't threatening inflation.
In other trading, the dollar was little changed against the Swiss franc at SF1.7964 francs from SF1.7979, against the British pound to US$1.4205 per pound from US$1.4184, and against the Canadian dollar to C$1.5350 from C$1.5380.
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