WORLD
Euro drops as Portugal’s jobless rate climbs before GDP report
Baku, March 14 (AZERTAC). he euro fell against most major peers as Portugal’s jobless rate rose to the highest in the shared currency’s history before a report forecast to show the region’s economy shrank at a faster pace last quarter.
The yen fluctuated against the dollar and euro after Bank of England Governor Mervyn King said currencies should be allowed to fluctuate based on monetary-stimulus measures, allaying concern the Group of 20 would criticize Japan for weakening its exchange rate. The pound slumped after the Bank of England said risks to the U.K.’s economic recovery were weighted to the downside. Sweden’s krona rallied after the central bank kept interest rates unchanged.
If the data shows the contraction is getting deeper, the economy is deteriorating -- that could see growth concerns resurface,” Eric Viloria, a senior currency strategist at Gain Capital Group LLC in New York, said in a telephone interview. “The focus has been on monetary policy, improving financial conditions, with the economy in the backdrop.”
The euro was little changed at $1.3452 at 5 p.m. in New York. The shared currency lost 0.1 percent to 125.64 yen. Japan’s currency added 0.1 percent to 93.39 per dollar after sliding to 94.46 on Feb. 11, the weakest level since May 5, 2010.
Japan’s currency has tumbled 17 percent in the past three months, the worst performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar declined 1.9 percent and the euro rose 4.3 percent.
he pound fell against all of its 16 most-traded peers after King said the outlook for consumer prices is higher than was forecast in November and weak productivity is boosting domestic costs. Sterling dropped 0.8 percent to $1.5542 after declining to 1.5524, the lowest since Aug. 3.
The krona climbed to a four-month high against the euro after the Riksbank refrained from monetary easing to weaken the currency. The Swedish currency rose as much as 1.4 percent to 8.4478 per euro, the strongest since Oct. 1.
“The Portugal premier sounded concerned about a sharp rise in unemployment, which is coming on the eve of tomorrow’s growth data from the euro zone,” Joe Manimbo, a market analyst at Western Union Business Solutions, a unit of Western Union Co., said by telephone from Washington, D.C.
The euro-area economy will shrink at a faster pace last quarter, the median forecast in a Bloomberg News Survey showed. Economists predict the 17-nation economy will contract by 0.4 percent, after reversing 0.1 percent last quarter.
The euro advanced earlier after the European Union’s statistics office said industrial production in the currency bloc increased 0.7 percent in December from the previous month, when it fell a revised 0.7 percent. Economists forecast a gain of 0.2 percent, according to a Bloomberg News Survey.
Markets are trying to “navigate the reality that everybody is trying to devalue their currencies,” Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., said today in a Bloomberg Television interview with Betty Liu. “There is too much reliance on central banks, and currencies are the collateral damage.”