The euro fell against most peers before data today that may show the currency bloc’s jobless rate climbed to a record and manufacturing contracted, boosting prospects the European Central Bank will cut interest rates.
The ECB, which has kept borrowing costs at a record low of 1 percent since December, will probably lower the benchmark rate by 0.25 percentage point on July 5, a Bloomberg News survey of economists shows. The 17-nation currency posted the biggest jump in more than a year versus the yen on June 29 after euro leaders eased terms on loans to Spanish banks, taking a step toward resolving the region’s debt crisis.
“We can’t buy the euro yet,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp., a currency-margin company. “The outlook for Europe’s economy is still bleak, and it still remains to be seen what economic measures will be undertaken there.”
The euro dropped 0.4 percent to $1.2620 as of 11:50 a.m. in Tokyo from the close in New York on June 29. It fell 0.4 percent to 100.68 yen after rising 2.2 percent at the end of last week, the biggest advance on a closing basis since March 2011. The greenback was little changed at 79.77 yen.
The jobless rate in the euro zone probably rose to 11.1 percent in May from 11 percent the prior month, a Bloomberg News Survey of economists showed. It would be the highest on record going back to 1990.
London-based Markit Economics may confirm its gauge of the currency bloc’s manufacturing was 44.8 in June on a final reading, unchanged from an initial estimate, according to a separate poll of economists. A level below 50 indicates contraction.