By TraderVox.com
Tradervox.com (Dublin) – The 17-nation currency is trading at almost three-week low against the yen as Europe’s economy shows some signs of weakness, adding pressure to European Central Bank policy makers to consider fresh easing steps. The euro dropped against the yen after advancing for the last four days as speculation European retail sales dropped last month rose. The pound dropped against the euro as the Bank of England prepares to meet tomorrow. Pound losses were enhanced by speculation that UK services growth slowed last month. Euro advanced against the yen prior to BOJ meeting which starts tomorrow.
Hitoshi Asaoko, a Tokyo-based Senior Strategist at Mizuho Trust & Banking Co, noted that investors are not willing to buy the euro after reaching $1.30 as the European economic outlook is worse than expected. The market is expecting a decline in the European retail sales, predicting a decline of 0.1 percent in August from 0.2 percent registered in July. If this is confirmed today, when the European Union Statistics releases the figures, this would mark the first consecutive decline this year. The data would be followed by the ECB policy makers meeting which will be held tomorrow in Frankfurt, where policy makers are expected to keep the benchmark interest rates unchanged at 0.75 percent.
After the ECB unrolled a mortgage-backed bond-buying program last month, the policy makers are expected to discuss its progress so far. The euro traded at 0.2 percent low against the dollar to settle at $1.2898 at the start of trading yesterday in London. It had touched its lowest level since September 11 of $1.2804 on Oct. 1. The 17-nation currency was exchanging at 100.89 yen per euro from its close yesterday of 100.97 yen. Against the dollar, the yen was trading at 78.23 per dollar from yesterday’s close of 78.16. The yen had touched its weakest level against the dollar since September 21 of 78.31. The pound was exchanging at 79.98 pence per Euro after it fell by 0.2 percent.
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