Euro Slips Versus Other Majors As Stocks Decline

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The euro saw some weakness on Friday in New York as global stocks fell, reducing risk appeal. The European currency moved away from a multi-month high against the dollar and multi-week best versus the yen.

On the economic front, Eurozone trade balance data showed a shortfall of EUR 4 billion in August compared to July's revised EUR 12.3 billion surplus. A year ago, the deficit was EUR 11.3 billion. Economists had expected a surplus of EUR 2.5 billion.

The German Federal Statistical Office announced that the number of people employed in manufacturing industries decreased 4.4% year-on-year to 5.03 million in August. This was the biggest decline since January 1995.

German Chancellor Angela Merkel's Christian Democrats proposed tax cuts worth EUR 20 billion over the next four years in talks with Free Democrats, their coalition partner. The figure is bigger than the EUR 15 billion pledged during election campaign.

The euro backed off a 14-month high against the dollar, moving below 1.4900. Early yesterday, the European currency reached as high as 1.4967.

In economic news from the US on Friday, a Federal Reserve report showed that industrial production increased by 0.7 percent in September following an upwardly revised 1.2 percent increase in August. Economists had been expecting a much more modest increase in production of about 0.2 percent.

The Reuters/University of Michigan consumer sentiment index fell to 69.4 in October from the final September reading of 73.5. Economists had been expecting a much more modest decrease to a reading of 73.3.

The euro reached a two-week low of 0.9092 against the British pound, continuing a downtrend that has spanned several days. The common currency had hit a 6 1/2-month high of 0.9411 earlier this week.

The euro inched lower against the Japanese yen, moving near 135.30. The European currency moved away from a six-week high of 136.06.

The Bank of Korea said it reached in an agreement with the Bank of Japan to extend their USD 20 billion bilateral currency swap arrangement until February 1, 2010.

(Market News Provided by RTTNews)