Euro Holds Gain Versus Peers Before ECB; Aussie Drops on Jobs

 The euro held yesterday’s gain against most major peers before European Central Bank policy makers meet today amid speculation the region’s economy isn’t fragile enough to warrant an interest-rate cut.

The euro yesterday halted a five-day drop against nine developed market counterparts tracked by Bloomberg Correlation Weighted Indexes, with ECB President Mario Draghi scheduled to speak after the bank’s decision. A gauge of U.S dollar strength remained lower, after falling yesterday, before data that may show an expansion in U.S. gross domestic product slowed last quarter. Australia’s dollar dropped against its 16 major peers after employment rose less than economists predicted.

The euro traded at $1.3503 at 9:54 a.m. in Tokyo, after yesterday rising 0.3 percent to $1.3513. The common currency fetched 133.29 yen from 133.31. The dollar was little changed at 98.72 yen. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major currencies, was at 1,014.84 after dropping 0.3 percent to 1,013.48 yesterday.

The ECB will leave its main refinancing rate at a record low 0.5 percent today, according to 67 of 70 economists surveyed by Bloomberg News. Bank of America Corp., Royal Bank of Scotland Group Plc and UBS AG predict the central bank will reduce borrowing costs by 25 basis points.

(Source: Bloomberg)

Commodities Tumble to Four-Month Low as Crude, Gold Lead Losses

 Commodities dropped to a four-month low, paced by declines in crude oil and gold, on signs of climbing supplies of raw materials at a time when the prospect of reduced Federal Reserve stimulus may cut demand.

The Standard & Poor’s GSCI Spot Index of 24 raw materials lost 1.7 percent to settle at 612.24 at 4 p.m. in New York, after touching 611.58, the lowest since July 1. West Texas Intermediate fell below $95 a barrel for the first time since June. Gold reached a two-week low. Hog futures capped the longest slump in three months, and cotton slumped to the lowest since January.

Production is poised to top demand for everything from coffee to zinc as ample rains this year boosted global crops and demand waned for metals, grains and energy. U.S. crude inventories climbed to the highest since June, data from the Energy Information Administration showed Oct. 30. Commodity returns will be “mostly flat” in the next 12 months, and there are “significant downside opportunities” in gold, copper and soybeans, Goldman Sachs Group Inc. said Oct. 18.

The Fed signaled diminishing concern over higher borrowing costs and cited “underlying strength” in the economy, even as it maintained $85 billion in monthly bond purchases on Oct. 30. The central bank’s statement opens the possibility of reduced debt buying as soon as December, Citigroup Inc. and Barclays Plc has said.

(Source: Bloomberg)

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)