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Sun, Apr 19, 2009 - Page 10 News List

Euro falls amid concern about unity in ECB

FOREIGN EXCHANGE A report showing EU factory output plunged in February dragged the euro lower. Meanwhile, signs of recovery boosted Asian currencies


The euro fell for a fourth day against the US dollar in the longest stretch of declines since October as European Central Bank (ECB) President Jean-Claude Trichet’s pledge to spur confidence failed to convince investors that policy makers are united in their views.

The dollar advanced to the level at which it traded versus the euro on March 18, erasing the decline that followed the US Federal Reserve’s announcement that it would buy Treasuries to help keep interest rates low.

The euro declined against the Canadian dollar and South African rand after a report showed on Thursday that February factory output in Europe plunged.

The euro decreased 1.1 percent to US$1.3044 at 5:04pm on Friday in New York, from US$1.3186 on Thursday. The currency fell as low as US$1.3018, the lowest level since March 18. The euro slid 1.2 percent to ¥129.33, from ¥130.90. The US dollar was little changed at ¥99.16, compared with ¥99.27.

Trichet said in Tokyo the ECB had to do everything possible to boost confidence and that uncertainty on policy would postpone a recovery in the region’s economy.

The Reuters/University of Michigan preliminary index of consumer sentiment increased to 61.9 in April from 57.3 in the previous month. The median forecast of 63 economists surveyed by Bloomberg was for an increase to 58.5.

Asian currencies mostly gained this week, led by the Indonesian rupiah, as signs a global recession is easing whetted investors’ risk appetite, helping draw funds to emerging markets.

The rupiah surged 5.5 percent, its best performance this year, as early election results indicating Indonesian President Susilo Bambang Yudhoyono may keep his post bolstered demand for Indonesian assets.

The rupiah ended the week at 10,738 per dollar in Jakarta, compared with 11,310 at the end of last week, and South Korea’s won advanced for a sixth week to 1,331.55, according to data compiled by Bloomberg.

The New Taiwan dollar was little changed at NT$33.8160 against the greenback on Friday, compared with NT$33.795 last Friday.

Elsewhere, the Philippine peso climbed 0.3 percent this week to 47.865 against the US currency. The Thai baht fell 0.1 percent to 35.45 from 35.40 a week ago. The Malaysian ringgit was little changed for the week at 3.6170 versus 3.6165.

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