The euro declined to its lowest level in over three months against the dollar after Germany’s unemployment numbers rose in May, while lending in the eurozone shrunk, fuelling speculation that the European Central Bank may roll out stimulus.
The euro declined 0.3 percent to trade at $1.3595 in mid-afternoon trading in New York, after earlier declining to $1.3589, its weakest since February 13. The shared currency fell 0.4 percent to 138.46 yen. The greenback fell 0.1 percent to 101.85 per yen.
“What we’re seeing is continued focus on the increasing likelihood of policy easing next week from the central bank,” Omer Esiner, a Washington-based, chief market analyst at brokerage firm Commonwealth Foreign Exchange Inc told Bloomberg. “I don’t expect a major rebound ahead of the ECB meeting.”
The euro has plunged 1.5 percent over the past four weeks, making it the second worst performing currency after the Swiss franc of the 10 advanced-economy currencies monitored by Bloomberg Correlation-Weighted Indexes. The yen has surged 1.3 percent while the dollar has advanced 0.6 percent.
The UK pound plunged 0.6 percent to trade at $1.6713 per dollar and hit a six-week low after a report released on Tuesday showed that mortgage approvals fell last month. This has fuelled speculation that the Bank of England may ease its monetary policy.
The New Zealand kiwi touched its weakest level in more than two months versus the dollar after the ANZ Bank reported that 53.5 percent of businesses polled were optimistic that the economy will improve in the next one year, down from April’s 64.8 percent. The kiwi plunged 0.8 percent to trade at 84.97 U.S. cents. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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