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21 April 2024

Euro retreats on rates cut speculations

By Agencies

The euro was traded near an eight-week low against the dollar before a report that may show European producer prices fell for a fifth month, giving the region's central bank more room to cut interest rates.

"European currencies such as the euro and the pound are likely to remain under downward pressure. There are still worries over their economies," said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow, Japan's largest currency broker.

The euro traded at $1.2847 in London from $1.2843 late in New York, when it reached $1.2706, the lowest level since December 5. The European currency was at 115.30 yen from 114.89 yen. The dollar traded at 89.68 yen from 89.59. The pound also weakened for a second day versus the dollar and the euro on indications that construction, which accounts for six per cent of the economy, shrank last month at the fastest pace in more than a decade.

The pound weakened versus 13 of the 16 most-active currencies.

The pound weakened to 90.17 pence per euro in London, from 90.02 pence. It was at $1.4257 from $1.4264.

The yen snapped three days of gains versus the greenback and the euro, after the Bank of Japan announced it will buy one trillion yen (Dh41 billion) of shares held by financial companies, reviving demand for higher-yielding assets.