Euro near eight-month low as short bets surge to most since 2012
Candice Zachariahs & Kevin Buckland
The euro was 0.4 percent from its lowest level versus the dollar since November as investors held the largest position in two years betting on a drop in the currency before the regions central bank meets this week.
Europes common currency slid 3.2 percent in the past three months amid unprecedented stimulus as the European Central Bank acted to spur inflation that slowed in July to the weakest in almost five years. Policy makers meet again Aug. 7. Australias dollar rose a second day after retail sales in the nation climbed at twice the pace economists forecast. The greenback held gains versus most major peers with data tomorrow predicted to show growth in services activity accelerated.
The trend in euro is clearly down, and we think that storys got further to run, said Imre Speizer, a markets strategist at Westpac Banking Corp. in Auckland. Draghi will maintain his dovish tone for sure, given the inflation data across Europe has been mostly weak, he said, referring to ECB President Mario Draghi.
The euro was little changed at $1.3419 as of 11:01 a.m. in Tokyo after touching $1.3367 on July 30, its lowest level since Nov. 12. It traded at 137.76 yen from 137.78. The yen changed hands at 102.66 per dollar after dropping 0.8 percent last week to 102.61.
The Bloomberg Dollar Spot Index was at 1,020.85, little changed from last week when it added 0.7 percent, the most since the period ending Jan. 17. It touched 1,023.42 on Aug. 1, the highest since March 20.
Sufficient Magnitude
The ECB will this week probably keep policy rates unchanged as recent data hasnt been of sufficient magnitude (yet) to warrant an immediate policy response, New York-based Royal Bank of Canada...
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