Euro weakens as Rajoy says Spain not under pressure to seek aid

Rajoy View

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.

Pound Rises

“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.

Bloomberg News

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