By TraderVox.com
Tradervox (Dublin) – The US dollar rose for the third day against the euro as reports from the 17-nation trading bloc showed that European manufacturing shrank for the ninth month as unemployment rose in the region’s greatest economy. The report has escalated concerns that the debt crisis in the region will slow the regions economic growth.
After the report, the euro came to close to two-week low against the yen prior to European policy makers meeting tomorrow. Investors and analysts are speculating that the policy makers will signal steps towards interest rates cut to spur growth.
According to Ian Stannard of Morgan Stanley in London, the weak data from the euro zone reflects the deterioration that has been seen in the region. He also added that the trouble is not limited to the struggling countries alone but is now affecting the large economies in the region. Some analysts have projected that the euro will come under immense pressure from major currencies. The dollar has improved against most of the currencies in the last few days and its expected to continue on this trend through out the week.
The US dollar increased by 0.7 percent against the euro to trade at $1.3145 per euro. It had earlier climbed by 0.8 percent which is the strongest since April 23. The greenback also increased against the yen by 0.3 percent to trade at 80.31 yen. The 17-nation currency declined against the yen by 0.4 percent to exchange at 105.56 yen. The euro had dropped against most of its peers after reports from the region and downgrading of Spain.
The yen continued to decline against the dollar after Moody’s Investor Service indicated that sentiments from Ichiro Ozawa who is a lawmaker in tax reforms may have impact of country’s credit rating. The US QE3 speculations continue to be dampened by reports and sentiments from the world’s largest economy.
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