Euro falls to 4-week low vs. yen on output data

The euro dropped to a four-week low against the yen as French and Swedish industrial production fell more than estimated, adding to speculation Europe’s economic outlook is worsening.

The 17-nation currency touched a two-month low against the dollar as Greek lawmakers prepared to vote Nov. 11 on next year’s budget. Sweden’s krona tumbled against all of its 16 most-traded counterparts. The yen strengthened as investors sought the safest assets.

“It doesn’t really come as a surprise that there are growth concerns in Europe -- they are in a recession -- but the contraction looks like it may be deeper,” said Eric Viloria, senior currency strategist for Gain Capital Group LLC in New York. “It’s going to add to negativity and weigh on the euro.”

The euro depreciated 0.4 percent to 100.88 yen at 9:34 a.m. in New York and touched 100.43, the weakest since Oct. 11. It has lost 1 percent this week. The shared currency slipped 0.3 percent to $1.2713 after touching $1.2690, the weakest level since Sept. 7. The yen gained 0.2 percent to 79.33 per dollar.

Viloria said the euro should be hemmed between $1.2740 and $1.2645 today.

French industrial output slid 2.7 percent from a month earlier, a report showed. The median prediction was for a 1 percent decline. Business confidence in the euro area’s second- largest economy held near a three-year low last month, according to Bank of France data.

Biggest Loser

The shared currency has declined 6.1 percent over the past year, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 0.7 percent and the yen weakened 1.2 percent. The krona was little changed.

“The European currencies are suffering, and probably deservedly so,” said Steven Barrow, head of group-of-10 research at Standard Bank Plc in London. “The economic data has been quite poor. Obviously policy makers didn’t respond this week, so maybe that’s a little bit disappointing.”

Sweden’s currency fell the most in five weeks against the euro. The data provide the central bank more reason to cut interest rates after lowering them three times since December.

The krona depreciated 0.8 percent to 8.5714 per euro, after falling as much as 0.9 percent, the biggest drop since Oct. 3. Sweden’s currency tumbled 1.1 percent to 6.7465 per dollar.

Swedish industrial production fell an annual 5 percent in September after rising a revised 2.7 percent the previous month, Statistics Sweden said on its website. Economists surveyed by Bloomberg News predicted a decline of 0.1 percent.

Dollar Gains

The Dollar Index touched a two-month high as investors sought safety amid worse-than-estimated financial results from companies such as Groupon Inc. and J.C. Penney Co., even as U.S. consumer confidence was projected to increase. The gauge rose for a third day, adding 0.3 percent to 81.036 and reaching 81.087, the highest since Sept. 7.

The Thomson Reuters/University of Michigan consumer sentiment index rose to 82.9 in November from 82.6 a month earlier, according to the median estimate of 71 economists surveyed by Bloomberg before a preliminary reading of the gauge due today. The reading for October was the highest since September 2007.

Canada’s dollar traded below parity with its U.S. counterpart for a second day, weakening 0.1 percent to C$1.0013 per U.S. dollar.

The Standard & Poor’s GSCI Index of 24 raw materials declined 0.2 percent. The S&P 500 Index fell 0.3 percent and the MSCI World Index lost 0.3 percent.

Bloomberg News

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