Euro Retreats From Yearly High Against Dollar As Stocks Fall

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The euro saw some weakness against lower-yielding rivals on Thursday in New York, as falling stocks reduced risk appeal. The European currency backed off a yearly high against the U.S. dollar.

The statement accompanying the U.S. Federal Reserve's interest rate wasn't as encouraging as some traders had hoped, leading to worries about the economic recovery.

The euro did get some support from data showing that German business confidence rose for a sixth month in September to reach a 12-month high, suggesting that the economy would continue its growth after exiting recession in the second quarter.

The euro slipped to a three-day low against the dollar, pulling back off the yearly high set earlier in the week. The common currency fell to 1.4679 after reaching 1.4843 on Wednesday.

A Labor Department report showed that jobless claims fell to 530,000 from the previous week's revised figure of 551,000. Economists had been expecting jobless claims to edge up to 550,000 from the 545,000 originally reported for the previous week.

The euro continued its assault on the struggling pound, extending a four-month high to 0.9156. The European currency has been trending notably higher for about two weeks.

Bank of England executive director and chief economist Spencer Dale said Thursday that the British economy is likely to see positive growth in the second half of 2009 as the economy appears to have turned an important corner on the road to recovery.

The euro recovered some of its recent slide versus the Japanese yen, moving near 133.90 in the early afternoon. The 16-member currency dipped as low as 133.33 earlier in the morning.

On the economic front in the Eurozone, the business climate index for German industry and trade rose to 91.3 in September from 90.5 in August, the Munich-based Ifo Institute for Economic Research said Thursday. However, it missed forecasts for a reading of 92.

Ifo's current conditions index climbed to 87 from August's 86.2 and the expectations index rose to 95.7 from 95.

Thursday, a money market survey released by the European Central Bank showed that the aggregate turnover in the euro money market dipped for the second consecutive year, mainly due to a drop in activity in the unsecured market.

Germany reduced its planned debt issuance for the fourth quarter by 17 billion euros to 59 billion euros, the Federal Finance Agency announced Thursday.

The euro saw some weakness against lower-yielding rivals on Thursday in New York, as falling stocks reduced risk appeal. The European currency backed off a yearly high against the dollar. The statement accompanying the U.S. Federal Reserve's interest rate wasn't as encouraging as some traders had hoped, leading to worries about the economic recovery. (Market News Provided by RTTNews)