The euro declined for a second day against the dollar after Spanish Prime Minister Mariano Rajoy said his nation doesn’t feel under any pressure to ask for a bailout, fueling concern the debt crisis will be prolonged.
The 17-nation currency dropped for the first time in seven days versus the yen on speculation this week’s European Union summit in Brussels will fail to provide clarity on potential financial aid for Spain. The pound gained against the euro after the U.K. budget deficit narrowed. Canada’s dollar weakened to a six-week low against its U.S. counterpart after September consumer prices data trailed forecasts.
“Up until recently, we had been getting some indications from Europe of a more conciliatory tone from officials with regards to Spain,” Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York, said in a telephone interview. “But concerns still remain. The worries of October are still out there.”
The euro fell 0.1 percent to $1.3059 at 9:15 a.m. in New York time after dropping 0.4 percent yesterday. The shared currency depreciated 0.1 percent to 103.52 yen. The yen was little changed at 79.28 per dollar.
South Africa’s rand rose versus all 16 of its major counterparts and is headed for a second week of gains as striking workers at Gold Fields Ltd., South Africa’s second- largest producer of the metal, returned to work and other gold mining companies improved a pay offer to workers.
The currency appreciated 0.5 percent to 8.6132 per dollar after earlier falling 0.2 percent.
The New Zealand dollar gained against all of its major peers except the rand after Pacific Investment Management Co., the manager of the world’s biggest bond fund, boosted holdings in the currency. The firm expects policy makers to cut interest rates to combat currency gains and weaker world growth.
The so-called kiwi climbed 0.2 percent to 82 U.S. cents.
European leaders committed to their goal of establishing a euro-area bank supervisor by year-end at the summit. The EU will seek to agree on a framework that makes the European Central Bank the main supervisor by Jan. 1, according to conclusions released today. The new system will be phased in over the next year and could may all 6,000 euro-area banks by Jan. 1, 2014.
Rajoy said the EU summit in Brussels, which entered a second day today, made “significant progress” and showed that the EU would fulfill its commitments. He also said his government would take a decision on asking for any bailout based on Spain’s interest.
“There is some disappointment over the latest EU summit,” said Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “That’s why the euro is a bit lower. We need some fresh good news to get things going further. It’s not apparent today.”
The euro is still headed for a weekly gain versus the dollar and yen on bets the sovereign debt crisis is easing.
The common currency appreciated 3.3 percent in the past three months, according to Bloomberg Correlation-Weighted Indexes tracking 10-developed market currencies. The yen dropped 4.4 percent and the dollar declined 3.5 percent.
The pound rose for the first time in four days against the euro after the Office for National Statistics said Britain’s budget shortfall excluding government support for banks narrowed to 12.8 billion pounds ($20.6 billion) in September from 13.5 billion pounds a year earlier.
“The deficit data was a pleasant surprise,” said Philip Rush, an economist at Nomura International Plc in London. “It shows less fiscal slippage.”
The U.K. currency gained 0.1 percent to 81.37 pence per euro, trimming this week’s decline to 0.9 percent. Sterling was little changed at $1.6049.
Canadian consumer prices rose 1.2 percent in September from a year ago, matching the August pace, Statistics Canada said today from Ottawa. The central bank’s preferred core rate slowed to 1.3 percent from 1.6 percent in August, the least in more than a year. Economists surveyed by Bloomberg forecast total inflation of 1.3 percent and a core rate of 1.4 percent.
The loonie, as the currency is nicknamed, fell 0.3 percent to 98.84 cents per U.S. dollar, touching the weakest level since Sept. 6.