By TraderVox.com
Tradervox.com (Dublin) – The 17-nation currency dropped against the dollar for the first time in three days as the concern about the region’s growth overshadowed the optimism of the upcoming EU Summit. The euro also dropped against most of its major peers as investors wait to hear when Spain will request for bailout. The drop also came prior to a report from Germany expected to show that consumer confidence is still low in the country and the region. Investors are also waiting to see the performance of the 10-year benchmark bonds in a Spanish bond auction later this week.
According to Marito Ueda, the Senior Managing Director at FXPrime Corp. in Tokyo, the economic data from the euro zone are showing some weaknesses in economic growth, which is weighing on the euro. Ueda expressed hopes that Spain will request bailout, while pointing out that this is yet to be clear. According to a market survey, the ZEW Center for European Economic Research will probably show that economic expectation in the euro area remained weak, coming in at -14.9 from negative 18.2 registered in September. Global economic slowdown has also resulted to decline on the euro, as a report from China showed that its exports to the EU fell by 107 percent in September. In addition Stanley Fischer, who is the Bank of Israel Governor, said that the world is on the verge of a recession.
The 17-nation currency has weakened by 5.4 percent in the past one year, making it the worst performer among the top ten currencies in the world. The yen has dropped by 1.8 percent while the dollar has increased by 1.9 percent in the same period. The euro has started the week with a 0.2 percent drop against the dollar to trade at $1.2928 at the start of trading in London. The single currency had appreciated by 0.6 percent in the past two trading days, despite closing the week on the low. It was little changed against the yen, trading at 101.67 yen. The dollar strengthened against the yen by 0.2 percent to trade at 78.57 yen.
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