Bloomberg News

Euro Approaches Three-Month Low Versus Dollar on Italy Concern

March 04, 2013

The euro approached the lowest level in almost three months against the dollar as Italy moved toward a new election and before data this week economists said will show the region’s economy shrank in the fourth quarter of 2012.

Japan’s yen rose against all but one of its 16 major peers as China’s CSI 300 Index of equities dropped by the most in two years, boosting demand for haven assets. Australia’s dollar sank to an almost eight-month low against its U.S. equivalent after building approvals declined. European Central Bank policy makers, led by President Mario Draghi, will meet on March 7, while central banks from the U.K., Japan and Australia also announce policy decisions this week.

“There’s a whole rash of reasons to be mindful of uncertainty,” said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “People are rationalizing where they want to be positioned throughout the mass of event risk this week and probably the way to play it is with a long-dollar bias. The ECB’s language will be monitored very closely.”

The euro fell 0.3 percent to $1.2988 as of 9:41 a.m. London time, after touching $1.2967 on March 1, the lowest since Dec. 11. The yen gained 0.3 percent to 121.53 per euro and was little changed at 93.58 per dollar.

The so-called Aussie slid 0.7 percent to $1.0129, after falling to $1.0115, the weakest since July 12.

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net


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