The Euro was down against the US Dollar in European trading despite previous buoyancy aided by expectations of a hawkish speech by ECB Chief Trichet tomorrow. The single Currency suffered some selling after weak economic data from the Eurozone’s engine of growth, Germany, which showed a decline in industrial output to -0.6 percent in April from a prior 0.7 percent growth rate, as well as a drop in exports. Meanwhile, Eurozone revised GDP data remained unchanged. EURUSD fell from 1.4670 to lows of 1.4599.
The British Pound fell to its weakest level against the Euro since early May after leading credit ratings agency Moody’s threatened to downgrade the U.K.’s top-notch ranking. Moody’s analyst Sarah Carlson said that if growth remains weak and the UK government fails to meet its debt-cutting target Moody’s will cut the triple A rating. EURGBP hit a one-month high of 0.8974 gaining 46 pips from 0.8929 level just before the news release. Against the dollar, the Pound lost around 80 pips to hit a session low of 1.6347 from 1.6437.
The Swiss franc was flat against the Dollar in European session, trading in a range between highs of 0.8374 and lows of 0.8349. Switzerland’s economy continued to show signs of robust health with economic data released today indicating the unemployment rate fell to a non-seasonally adjusted 2.9 percent in May from 3.1 percent the previous month.
The U.S. Dollar extended losses against the Japanese Yen slipping to a fresh one-month low and stayed under broad selling pressure across the board on concerns that a sluggish U.S. economic recovery will keep interest rates low until the end of the year. USDJPY fell from the European open price of 80.03 down to break the key support level of 80 to bottom at 79.69. The Yen is generally seen as a safer currency versus the Dollar.
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