Euro Falls to 2-Week Low as Inflation Data Fuel ECB Easing Bets

The euro slid to a two-week low against the dollar and the yen as signs of economic weakness in the currency bloc fueled speculation the European Central Bank will cut interest rates.

The 17-nation currency extended its biggest drop in more than a year versus the greenback before data forecast to show manufacturing contracted in France while it expanded in the U.S. Reports yesterday showed the euro region’s inflation slowed and unemployment climbed to a record. The dollar headed for a weekly gain against most of its major peers.

The euro slid 0.3 percent to $1.3545 at 10:47 a.m. in Tokyo after reaching $1.3540, the weakest since Oct. 17. Yesterday it dropped 1.11 percent, the most since June 2012. The shared currency declined 0.4 percent to 133.10 yen and reached 133.05, the lowest since Oct. 16.

The dollar fetched 98.29 yen from 98.36, set for a 0.9 percent weekly gain. It’s up 1.9 percent versus the euro since Oct. 25.

The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major currencies, was at 1,012.41 from 1,011.72 yesterday, set for the highest close since Oct. 15. The gauge was set for a 1.2 percent climb this week.

(Source: Bloomberg)