“The euro fell from near an 11-month high against the dollar after reports showed Italian industrial orders dropped and Spanish bad loans increased, adding to sign the region’s economy will struggle to expand this year.
Europe’s shared currency slipped from the highest in 20 month against the yen amid speculation its 4.7 percent gain this year has been too rapid. The Swiss franc declined to the least since May 2011 against the euro after a trade union called on the nation’s central bank to change its cap on the currency. South Africa’s rand dropped on concern labor protests will curb exports. The pound slid for a sixth day against the dollar as retail sales unexpectedly fell.
“The euro is giving back some of its gains,” said Lutz Karpowitz, a senior foreign-exchange strategist at Commerzbank AG in Frankfurt. “It went too high, too quickly. The economy is still very weak. We don’t expect the euro strength to remain.”
The euro declined 0.2 percent to $1.3356 at 7:39 a.m. New York time after appreciating to $1.3404 on Jan. 14, the strongest since Feb. 29. Europe’s shared currency rose 0.1 percent to 120.35 yen, after reaching 120.71, the most since May 2011. Japan’s currency lost 0.2 percent to 90.03 per dollar.
Europe’s shared currency will fall to $1.29 by the end of March, Commerzbank predicts.
Italian industrial orders fell 0.5 percent in November from a month earlier, a report showed today. The euro-area economy will contract 0.1 percent this year, according to analyst predictions compiled by Bloomberg. The U.S. will expand 2 percent, according to a separate survey.
