Euro posts first decline in six weeks

New York/London: The euro fell for the first time in six weeks versus the dollar as reports showed the region’s economy struggling amid the debt crisis.

The yen advanced against all major currencies as weaker-than-forecast data from China and rising tensions between the two nations spurred demand for haven assets. Riskier currencies declined versus the dollar as report showed Chinese manufacturing may contract for an eleventh month. The 17-nation euro declined versus most of its major counterparts before Spain’s government addresses budget issues this week.

“Even though the moves by the European Central Bank can take away tail risk, you still have a really dismal economic situation, where at best, it’s stagnant, and at worst, deepening recession,” said Omer Esiner, chief market analyst in Washington at Commonwealth Foreign Exchange Inc, a currency brokerage.

Esiner said he expects the euro to end the year between $1.25 (Dh4.59) and $1.28.

The euro dropped 1.1 per cent this week to $1.2980 in New York, its largest decline since July 6. The shared currency weakened 1.4 per cent to 101.46 yen (Dh372.56), its first weekly loss since August 10. The yen strengthened 0.3 per cent to 78.17 per dollar.