Euro Set for Seventh Weekly Decline as Region’s Inflation Slows
The euro was set for a seven-week slide, the longest stretch in more than a decade, as a report showed gains in consumer prices in the region slowed this month.
The 18-nation currency headed for drops this month versus most of its 16 major counterparts before European Central Bank officials meet Sept. 4. ECB President Mario Draghi said Aug. 22 inflation expectations in the region have fallen, fueling bets officials will add to monetary stimulus. Canada’s dollar extended gains after a report show its economy expanded at the fastest pace in three years. Russia’s ruble weakened to a record.
“Weaker inflation, even if expected, will allow the ECB to keep talking dovishly and holding out that prospect of more easing,” said Stuart Bennett, head of Group of 10 foreign-exchange strategy at Banco Santander SA in London. “One can only see it’s euro-negative.”
The euro was little changed at $1.3192 as of 8:34 a.m. in New York. It’s down 0.4 percent this week, set for the longest stretch of weekly declines since December 1999. It has weakened 1.5 percent since July 31, poised for a second monthly drop.
The dollar gained 0.2 percent to 103.93 yen, the biggest increase since Aug. 20. Japan’s currency weakened 0.3 percent to 137.11 per euro.
U.S. markets will be closed on Sept. 1 for Labor Day.
Consumer prices rose 0.3 percent in August from a year earlier after a 0.4 percent increase in July, the European Union’s statistics office in Luxembourg said today. That’s the weakest rate since October 2009 and in line with the median forecast in a ForexSQ News survey. Unemployment (UMRTEMU) remained at 11.5 percent in July, Eurostat said in a separate report.
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