SINGAPORE: The euro was set for the first five- day drop in three weeks before data forecast to show the economy of the region that shares the currency shrank.
The 17-nation euro remained lower against the yen following a two-day slide after economists in a European Central Bank survey cut their 2013 growth estimate for the currency bloc. The dollar maintained a gain versus the yen from yesterday as Treasury yields rose before a report projected to show U.S. retail sales advanced for the first time in four months.
“The markets will have to assume euro weakness,” said Gavin Stacey, chief rate strategist in Sydney at Barclays Plc. “The euro situation is continuing to deteriorate on the economic front and obviously does warrant more aggressive measures from the ECB.”
The euro traded at $1.2298 and 96.66 yen as of 8:26 a.m. in Tokyo, little changed from the close in New York yesterday. It has lost 0.7 percent this week against the greenback and 0.6 percent versus the Japanese currency. The dollar fetched 78.59 yen after advancing 0.2 percent yesterday to 78.57. It has risen 0.2 percent since Aug. 3.
Gross domestic product in the euro area probably contracted 0.2 percent in the three months through June after being unchanged in the first quarter, according to the median forecast of economists in a Bloomberg News survey. The European Union’s statistics office will report the figure on Aug. 14.
The economists polled by the ECB reduced their 2013 growth projection to 0.6 percent from 1 percent. The region’s economy is likely to shrink 0.3 percent this year, they said in the ECB’s monthly bulletin yesterday.
French industrial production probably rose 0.1 percent in June from a month earlier when it dropped 1.9 percent, a separate Bloomberg survey of economists shows before the data are released today.
In the U.S., retail sales are estimated to have increased 0.3 percent last month, the biggest gain since March. The Commerce Department reports the figure on Aug. 14.
Treasury two-year note yields touched 0.28 percent yesterday, the highest since July 6. (Bloomberg/msw)
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