Euro Near 2-Week Low Before German Business Confidence

The euro was near a two-week low before a report forecast to show German business confidence declined, 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 euro traded at $1.2996 as of 11 a.m. in Tokyo, unchanged from yesterday when it fell to $1.2973, the lowest since April 8. The 17-nation currency declined 0.1 percent to 129.17 per euro. The yen rose 0.1 percent to 99.41 per dollar.

The Ifo institute’s business climate index for Germany, based on a survey of about 7,000 executives, dropped to 106.2 in April from 106.7, according to the median estimate of economists surveyed by Bloomberg News before today’s report. A German purchasing managers’ index unexpectedly fell yesterday, while the Bundesbank said in its monthly report this week that the nation’s recovery may be delayed.

(Source: Bloomberg)