Cristobal Montoro, Spain's budget minister. Photographer: Denis Doyle/Bloomberg
Bloomberg News By Keith Jenkins and Monami Yui on June 05, 2012
The euro declined from a one-week
high against the dollar as speculation the region’s sovereign
debt crisis is worsening sapped demand for the single currency.
The euro fell for the first time in three days against the
yen before a report forecast to show the region’s retail sales
fell in April and Spanish Budget Minister Cristobal Montoro
called for European funds to be used to shore up the nation’s
banks. Finance ministers and central bank governors from the
Group of Seven hold a call today to discuss the debt crisis.
Australia’s dollar rose after the central bank cut interest
rates by less than swap rates had indicated.
Rallies in the euro “are still worth selling into because
the structural negatives are not going to go away,” said Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of
Commerce in London. “There are still a lot of structural
headwinds, and the data isn’t particularly constructive, and the
lack of political coherence is another ongoing concern.”
The euro declined 0.3 percent to $1.2456 at 9:03 a.m. in
London after rising to $1.2542, the strongest level since May
29. The shared currency dropped 0.6 percent to 97.35 yen. It
rose 1.2 percent over the previous two days. Japan’s currency
was little changed at 78.24 per dollar.
Spanish banks don’t need an “excessive” amount of funds,
and the question is “where that figure comes from,” Montoro said
in an interview with broadcaster Onda Cero today. “That’s why
it’s so important that the European institutions open up and
help us achieve, help facilitate, that figure because we’re not
talking about astronomical figures.”
Retail Sales
Euro-region retail sales declined 0.1 percent in April,
after gaining 0.3 percent in March, according to the median
forecast of a Bloomberg News survey before today’s report.
G-7 members are “concerned about the unstable situation in
the current global economy and we need to share these
concerns,” Japan’s Finance Minister Jun Azumi told reporters in
Tokyo. Canadian Finance Minister Jim Flaherty said yesterday in
Ottawa that officials would discuss “the situation in Europe,”
without elaborating.
Australia’s dollar strengthened for a second day after the
central bank cut the overnight cash-rate target by 25 basis
points, or 0.25 percentage point, to 3.5 percent.
Swaps data compiled by Bloomberg had shown a more than 40
percent chance of a reduction to 3.25 percent before the Reserve
Bank of Australia made its announcement.
The so-called Aussie rose 0.4 percent to 97.71 U.S. cents
after dropping to 95.82 on June 1, the weakest since Oct. 5.
To contact the reporters on this story:
Monami Yui in Tokyo at
myui1@bloomberg.net
Keith Jenkins in London at
kjenkins3@bloomberg.net
To contact the editor responsible for this story:
Daniel Tilles at
dtilles@bloomberg.net
