The euro fell to its lowest level in three months after the German’s IFO Institute’s index of business confidence declined, leading investors to speculate that the European Central Bank may ease policy when it meets in June.
The euro tumbled 0.2 percent to $1.3630 just after mid-day trade in New York, after earlier plunging to $1.3616, the lowest level since February 13. The 18-nation currency remained slightly unchanged at 138.99 yen after earlier sliding to 138.15 on Wednesday, the lowest since February 6. The dollar rose 0.2 percent to trade at 101.98 yen, extending its 0.4 percent gain on Thursday.
The euro also took a hit from speculation that euro-sceptic politicians will gain an upper hand in the European Parliament elections, reported Bloomberg. The shared currency has declined 0.5 percent against the dollar so far this week.
“A modest downside miss in the German Ifo sparked some renewed selling interest in euro-dollar,” said Robert Lynch, a New York-based currency strategist at HSBC Holdings Plc. “A close below the 200-day moving average would likely add some degree of bearishness for the trend-following community.”
The Swedish krona fell to a seven-month low against the greenback after data indicated that business and consumer confidence missed estimates. The krona was 0.9 percent lower at 6.6465 per dollar, after earlier touching its lowest level since November 21. The currency also fell 0.7 percent to 9.0586 per euro.
The IFO Institute’s index of German business climate, which relies on feedback from 7,000 executives, declined to 110.4 this month from 111.2 in April. A Swedish report of consumer confidence surged to 100.4 in May from April’s reading of 99.2, lagging the economists’ prediction of a gain to 100.7. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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