Euro drops to eight-week low on Greece aid concern; pound falls

Dollar ‘Positive’

Employment and the economy are central themes before tomorrow’s vote, with President Barack Obama and Republican nominee Mitt Romney each trying to convince voters he can best energize the economic expansion.

“The U.S. election is becoming a positive for the dollar,” said Mellor. “The deficit is too big for any flexibility on either side. It’s got to be reduced, so that’s out of the equation.”

The Dollar Index, which IntercontinentalExchange Inc. uses to track the U.S. currency against those of six major trading partners, gained 0.2 percent to 80.75. The gauge rose above its 200-day moving average, currently at 80.67, for the first time since Sept. 7.

The pound declined for a second day versus the dollar after an industry report showed U.K. services growth slowed more in October than economists forecast.

Sterling fell before the Bank of England holds a two-day meeting this week to decide whether to increase monetary stimulus through so-called quantitative easing.

‘Further Weakness’

“The U.K data seems to have knocked sterling this morning but I’d be wary of further weakness,” said Michael Derks, chief strategist at FXPro Group Ltd. in London. “The hurdle for more QE is reasonably high.”

The U.K. currency dropped 0.3 percent to $1.5978 after falling to $1.5962, the lowest since Oct. 24. The pound was little changed at 80.04 pence per euro.

The krona strengthened against the euro after service production in the Scandinavian nation rose to 50.3 in October from a revised 47.2 the previous month. A reading above 50 signals an expansion.

The krona rose 0.4 percent to 8.5758 per euro. Sweden’s currency was little changed versus the dollar to 6.7073.

The Turkish lira strengthened after the nation received its first investment-grade ranking since 1994. Fitch Ratings raised the country by one level to BBB-, citing an easing in economic risk and lower government debt.

The lira climbed 0.6 percent to 1.7824 per dollar, and gained 0.9 percent to 2.2793 against the euro. It has risen for 10 days versus the euro, the longest streak since the single currency was introduced in 1999.

Bloomberg News

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