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Rising Unemployment and Falling PMI Data Takes the Euro Below 1.30 For the first Time in Two Months

“The euro fell below $1.30 for the first time in two months after reports showed manufacturing contracted in February and unemployment climbed to a record.

The common currency extended a fourth weekly loss against the greenback as the data added to signs the region remains stuck in a recession and backed the case for the European Central Bank to cut interest rates. The Dollar Index rose to the highest level since August as investors sought safer assets. The pound tumbled after a British factory index unexpectedly shrank in February.

“The overall picture is consistent with a euro-zone economy that is still stuck in recession,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “There are downside risks for the euro. The ECB could signal it is closer to further monetary easing next week.”

The euro fell 0.5 percent to $1.299 at 7:28 a.m. New York time, extending this week’s decline to 1.5 percent. The single currency gained 0.2 percent to 120.51 yen, having depreciated 2 percent this week. The dollar strengthened 0.2 percent to 92.77 yen.

The 17-nation euro slid against all but one of its 16 major peers in February, losing 3.8 percent against the greenback and 3 percent against the yen. The dollar rose 0.9 percent versus the yen, a fifth monthly gain, the longest winning streak since August 2008.

Manufacturing Shrinks…”

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