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  1. #21
    The euro risks dropping toward parity with the U.S. dollar over the next 2 1/2 years as the region enacts policies aimed at weakening the currency to bolster growth, Morgan Stanley said.
    The 17-nation euro, which has slid 2.6 percent this year, will continue to decline as the bailout package for Cyprus fans concern about the safety of bank deposits in the region, Hans- Guenter Redeker, the head of global currency strategy at Morgan Stanley, said in an interview yesterday in Sydney. Italy’s struggle to form a government after last month’s divided vote will also weaken the euro, he said.
    “This policy concerning Cyprus, people will be getting more concerned in funding the peripheral, providing deposits there,” Redeker said. “The long-term implication is that monetary transition in Europe is not working, there’s no credit, no growth, and fiscal policy is still fragmented. So, therefore, you need to be fairly pessimistic for the outlook.”


  2. #22
    “The re-emergence of concerns in Italy poses downside risks to the euro, as Bersani has been unable to form a government, thus far,” Morgan Stanley strategists led by Hans- Guenter Redeker wrote in an e-mailed note to clients yesterday. Markets will focus on economic data “to see if this volatility is spilling over to real output.”
    A final reading of a gauge of euro-area manufacturing by London-based Markit Economics will probably confirm a 20th month of contraction in March, according to the median estimate of economists surveyed by Bloomberg News. Markit will publish the figures on April 2. Two days later, European Central Bank officials will gather for a monetary policy decision, when they are expected to hold the benchmark interest rate at a record-low 0.75 percent, a separate poll of analysts showed.


  3. #23
    The euro weakened following a decline last month as economic data signal the 17-nation region is struggling to recover, damping demand for the currency.
    The euro fell versus most of its 16 major counterparts ahead of a report tomorrow that may show unemployment in the bloc climbed to a record in February, two days before European Central Bank officials meet to set interest rates. The yen strengthened, after last month capping its longest stretch of losses in 12 years, as a drop in Asian stocks spurred demand for refuge assets.
    “There may be talks at this week’s ECB meeting about something accommodative,” said Hideki Shibata, a senior rates and currencies strategist at Tokai Tokyo Research Center Co. in Tokyo. “The euro is being sold because of such a risk.”


  4. #24
    The euro remained lower following a drop yesterday amid speculation the European Central Bank will use its meeting tomorrow to signal future economic stimulus.
    “A rate cut is still an option for the ECB, so we can’t willingly buy the euro yet,” said Yoshitsugu Fujita, an assistant vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd. “Traders want to close their long dollar-yen positions before the BOJ meeting, which is a big event.”
    Data yesterday showed the euro-area jobless rate rose to a record 12 percent in the first two months of this year, adding to signs that the currency bloc’s recession extended into the first quarter. The ECB, which has held its key rate at 0.75 percent since July, forecasts the economy will shrink 0.5 percent this year.


  5. #25
    The euro climbed to the highest level versus the yen since 2010 as the Bank of Japan (8301)’s effort to double the nation’s monetary base within two years fueled demand for higher-yielding assets.

    The BOJ “has definitely been a consistent driver for the past couple of days for sure,” Brad Bechtel, managing director at Faros Trading LLC in Stamford, Connecticut, said in a telephone interview. “The euro is going to be looking at this $1.3146 level, which is where the 100-day moving average comes into play. We’re probably going to test that.”


  6. #26
    The euro fell after Moody’s Investors Service said the risk Cyprus will exit from the currency bloc remains high.

    Josef Ackermann, the former chief executive officer of Deutsche Bank AG (DBK) who now chairs Zurich Insurance Group AG, said allowing the euro to fail would be more costly than deepening the region’s fiscal and political ties.
    “The destruction of the euro system would be much more expensive than the further construction,” Ackermann said in an interview in Kuwait City on April 13. “We need a united Europe to negotiate at eye level with other major regions like the United States, China, India and some other countries.”
    While financial markets calmed after European Central Bank President Mario Draghi pledged in July to do whatever it takes to safeguard the euro, the currency-bloc is now in its second year of recession, battered by a debt crisis that’s forced five of its 17 members to take bailouts. Countries continue to spar over issues such as building a common fund for bank failures.

    Last edited by Patkhak; 04-15-2013 at 11:38 AM.

  7. #27
    The euro extended losses versus the dollar and yen after Dow Jones reported Bundesbank President Jens Weidmann said the European Central Bank may cut interest rates if new information warrants the move.

    “Sometimes you get a bit of complacency, but these comments underscore and remind people that more accommodation could be coming from the ECB,” Brian Kim, a currency strategist at Royal Bank of Scotland’s RBS Securities unit in Stamford, Connecticut, said in a telephone interview. “It shows that people need to be on guard because the fundamental situation still isn’t great in the euro zone.”


  8. #28
    The euro was 0.3 percent from a two-week low before a German report forecast to show business confidence fell in the currency bloc’s largest economy, fueling speculation the European Central Bank will cut interest rates.

    “The euro is susceptible to downward pressure,” said Masato Yanagiya, the New York-based head of foreign-exchange and money trading at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-biggest financial group by market value. “As economic data from Europe are very bad, expectations of a rate cut by the ECB are rising gradually.”
    The 17-nation euro traded at $1.3006 as of 6:53 a.m. in London, little changed from yesterday when it fell to $1.2973, the lowest since April 8. It was at 129.31 yen from 129.28. Japan’s currency rose 0.1 percent to 99.42 per dollar.


  9. #29
    The euro has often ignored policy maker pronouncements and “danced to its own tune” during the region’s sovereign debt crisis, according to a working paper published by the European Central Bank.

    The study was based on a database of more than 1,100 public statements about the turmoil by leaders at the regional and international level from October 2009 to November 2011.
    While steps such as aid from the ECB and European Union bailouts may have affected exchange rates, this month’s paper suggests “financial markets might have been less reactive to the public debate by policy makers than previously feared.”
    When rhetoric did influence the euro’s volatility, the authors found it tended to be by politicians from countries with top credit ratings. In particular, comments related to the contents and conditions of rescue packages, the possibility of defaults or speculation about the role of the private sector had an impact.


  10. #30
    The euro extended its slide to a sixth day against the pound, the longest run of declines in a year.

    The median estimate of economists shows the European Central Bank (EURR002W) will cut borrowing costs by 25 basis points from the current all-time low of 0.75 percent at its May 2 meeting. The common currency declined 0.2 percent to 84.06 pence following a 1.8 percent drop last week.


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