Euro retreats to 1-month low

By Anchalee Worrachate | January 14, 2009, Wednesday |

Print Edition

THE euro fell for a third day versus the United States dollar, reaching a one-month low, as traders raised bets that the European Central Bank will cut interest rates, decreasing the appeal of the region's assets.

The 16-nation currency also declined to the lowest level in more than a month against the yen after Standard & Poor's said on Monday it may cut Spain's credit rating, while Germany will spend 50 billion euros (US$66.6 billion) to support its economy, Chancellor Angela Merkel said in Berlin on Monday night.

"The trend in the euro remains lower," UBS AG analysts wrote in a note to clients. "Macroeconomic data releases suggest growth conditions in the euro zone will remain under considerable stress."

The euro traded at US$1.3277 as of 9:13am in London from US$1.3362 on Monday in New York. The currency touched US$1.3222, the lowest level since December 11.

UBS, which expects the ECB to cut its benchmark rate by 50 basis points tomorrow, has a euro target of US$1.2850.

Economy

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Euro retreats to 1-month low

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