“Australia’s dollar declined against most of its major peers after a preliminary survey showed China’s manufacturing is expanding at a slower pace, dimming the outlook for South Pacific nation’s exports.

Local bonds and the so-called Aussie fell versus the U.S. currency as Italy’s general election result estimates due today curbed demand for riskier assets. Australia’s dollar reached a 4 1/2-year high against the yen on speculation Japan’s government will nominate as central-bank head Haruhiko Kuroda, who has said expanding monetary stimulus can be justified.

“It’s a surprisingly softer number, suggesting that the Chinese economy is pulling back a little,” said Greg Gibbs, a Singapore-based senior currency strategist at Royal Bank of Scotland Group Plc. “It has contributed to some softness in the Australian dollar. The Aussie is in a gradual downtrend.”

The Australian dollar declined 0.4 percent to $1.0278 at 4:59 p.m. in Sydney from the end of last week. It touched 97.73 yen, the highest since August 2008, before trading at 96.81, 0.4 percent above the close on Feb. 22. New Zealand’s dollar slid 0.1 percent to 83.71 U.S. cents. The kiwi climbed 0.7 percent to 78.85 yen, adding to a 0.8 percent gain on Feb. 22.

The yield on Australia’s 10-year bonds fell three basis points, or 0.03 percentage point, to 3.51 percent.

The preliminary reading of a Purchasing Managers’ Index fell to 50.4 in February from 52.3 in January, according to a statement from HSBC Holdings Plc and Markit Economics today. That compared with the 52.2 reading expected by economists surveyed by Bloomberg News. China is Australia’s biggest trading partner and New Zealand’s second-largest export market.

RBA Cut…”

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“The yen weakened to the lowest level in almost three years against the dollar and Japanese stocks led global shares higher on speculation Prime Minister Shinzo Abe will nominate a central bank chief who favors stimulus. The euro gained as Italy voted in general elections.

The yen depreciated 0.4 percent to 93.75 per dollar at 7:05 a.m. in New York and earlier traded at its lowest level since May 2010. The euro strengthened 0.6 percent to $1.3271 and Italian bonds advanced. The Nikkei 225 Stock Average (NKY) surged 2.4 percent to its highest level since September 2008, helping the MSCI All-Country World Index gain 0.5 percent. Standard & Poor’s 500 Index futures increased 0.5 percent. Silver climbed 1.5 percent and U.K. natural gas jumped to a one-year high.

Abe is likely to call on Asian Development Bank PresidentHaruhiko Kuroda, who said this month there is “substantial room” for easing, and Kikuo Iwata as his deputy, according to two officials with knowledge of the discussions. Initial estimates of Italy’s election results are due after 3 p.m. in Rome, with Pier Luigi Bersani the front-runner in opinion surveys two weeks ago.

“The market seems to have formed an opinion that Kuroda is a dove and if he indeed becomes the new BOJ governor, he would be willing to do much more to support growth,” saidGeoffrey Yu, a senior currency strategist at UBS AG in London. “The yen is weakening on speculation that there will be more policy easing.”

The yen weakened against all 16 of its major peers, losing 1 percent versus the euro. Japan’s currency has dropped 6.7 percent this year, the biggest loser among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The pound has seen the second-biggest decline, falling 5.9 percent.

U.K. Downgrade…”

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“U.K. government bonds fell, following the biggest drop in 10-year yields since September yesterday, as an improvement in German business sentiment undermined demand for the safest assets.

The pound rose for a second day against the euro after the European Central Bank said financial institutions will repay less of its second round of three-year loans next week than economists estimated, indicating European banks are wary of lending to each other. Sterling headed for a second weekly decline versus the dollar after Bank of England policy maker David Miles said the central bank should increase stimulus….”

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“The euro touched the lowest level against the dollar in more than a month after the European Central Bank said financial institutions will repay less of its three-year loans next week than economists forecast.

The 17-nation currency trimmed gains versus the yen as the ECB said 356 banks will hand back 61.1 billion euros ($80.5 billion) on Feb. 27, the first opportunity for early repayment of the second Longer-Term Refinancing Operation. The median forecast of economists in a Bloomberg News survey was for 122.5 billion euros. The Australian dollar rose the most in seven weeks versus the U.S. currency after central bank Governor Glenn Stevens said the bar for intervention was high.

“The LTRO announcement is lower than expectations and the euro has taken a bit of a hit on that,” said Bilal Hafeez, global head of foreign-exchange strategy at Deutsche Bank AG in London. “This could imply banks aren’t finding so much demand for credit in the euro area, which will weigh on the European growth picture. The ECB is unlikely to tighten policy this year, which weighs on the euro.”

The euro fell 0.1 percent to $1.3171 at 7:34 a.m. in New Yorkand touched $1.3157, the lowest level since Jan. 10. The common currency was little changed at 122.86 yen after strengthening as much as 0.8 percent. The yen weakened 0.2 percent to 93.27 per dollar.

The euro also declined after the European Commission forecast the region’s economy will shrink for a second year in 2013. Gross domestic product will contract 0.3 percent in 2012, compared with a November prediction of 0.1 percent growth, the Brussels-based commission said…..”

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“The Australian dollar climbed after Reserve Bank Governor Glenn Stevens endorsed the current level of borrowing costs and signaled that the bar is high for currency intervention.

The so-called Aussie advanced versus all of its 16 major counterparts after Stevens said “there is a good deal of interest rate stimulus in the pipeline” in testimony today to a parliamentary committee in Canberra. It’s set for a five-day gain after five consecutive weeks of declines, the longest stretch in eight months. New Zealand’s currency climbed after a report today showed credit card spending increased for a third- straight month in January.

“Stevens’ comments are very firmly focused on what a strong currency means for inflation, rather than including any threat of action,” said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp. (WBC) “The tone of his prepared comments indicates no great urgency to cut rates in the near term.”

The Australian dollar rose 0.7 percent to $1.0314 as of 4:49 p.m. in Sydney. It’s gained 0.1 percent since Feb. 15, when it completed a five-week decline, the longest streak since June. New Zealand’s dollar, known as the kiwi, climbed 0.4 percent to 83.76 U.S. cents, trimming its five-day drop to 0.9 percent.

The rate on Australia’s 3-year government bonds, among the most sensitive to interest-rate expectations, rose 3 basis points to 2.88 percent. The 10-year yield was little changed at 3.54 percent.

Interest-rate swaps data compiled by Bloomberg show traders see a 69 percent chance RBA policy makers will keep the cash rate at 3 percent when they next meet on March 5, up from 62 percent at the end of last week.

Intervention Consideration…”

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“Peter Krauth writes: You may not have even noticed, but the first shots have already been fired in the next World War.

Only this time there are no tanks, fighter jets, nuclear subs, or missiles. And it’s not the North against South, or even East against West.

It’s war by other means and it pits fiat currency against fiat currency in a multi-trillion dollar knock-down drag out between the world’s central bankers.

At stake is nothing less than the value of your life savings.

Its goal is to cheapen worldwide currencies-which could make every dollar you own worth even less.

Thanks to horrible fiscal mismanagement, virtually every nation in the world now wants its own currency to become cheaper against those of other nations.

Welcome to the currency wars.

Think of it as a race to the bottom. But where it stops nobody knows.

The Lies Behind the Currency War
James Rickards, senior managing director of Tangent Capital Partners, and author of Currency Wars: The Making of the Next Global Crisis, thinks this battle is about an effort to get economies going by importing inflation rather than attempting to boost exports.

But I believe it’s about both reflating economies and stimulating exports. After all, national leaders are becoming increasingly desperate.

And though they’d like us to think otherwise, the currency war is here, and it’s escalating.

In fact, G-7 finance ministers and central bank governors recently released a statement to try and downplay the intensifying currency war noting that, “…we will not target exchange rates.”

Yet true-to-form, these high profile leaders are doing the exact opposite of what they’re saying.

In the wake of the financial crisis, the world had seen unprecedented yet (until now) coordinated financial stimulus. But today central banks are so addicted to the temporary “fix” from printing money, they have little concern for its effects on other nations.

Now barely a day goes by without a currency war-related headline. In fact, here are two I came across last week: “Global Monetary System Headed for Collapse” and “The Fed’s Global Unintended Consequence.”

There are plenty of others and you can expect quite a few more as this situation continues its downward spiral.

Upping the Ante
Of course, the U.S. has been labeling China as a currency manipulator for several years now. They claim the Yuan is kept artificially low so that Chinese imports remain cheap.

Talk about the pot calling the kettle black…

Over the last four years, America doubled the entire debt accumulated since the nation’s founding, going from $8 trillion to $16 trillion in the hole. What’s more, The Federal Reserve’s balance sheet recently set a notorious record, ringing in at over $3 trillion for the first time ever.

Then the Swiss, hurting from the effects of a strong Franc (CHF), decided that their currency was getting too strong and set a floor under it so the EUR/CHF rate couldn’t drop below 1.20.

French President Hollande also recently told members of the European parliament that EU leaders “need to think about our currency, the euro. We must have an exchange rate policy otherwise it will have rates that do not reflect the strength of its economy.”

But the most aggressive player in the currency war, at least so far, is Japan.

For a host of reasons, including zombie banks and horrible demographics, Japan’s economy has stagnated and deflated for an entire generation. Its flagship Nikkei index peaked near 40,000 in 1989, yet today stands at 11,300.

With two straight quarters of contraction, Japan is “officially” back in recession…..”

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“The euro declined below $1.32 for the first time in six weeks after an industry report showed services and manufacturing in the region shrank at a faster pace in February than economists forecast.

The 17-nation currency fell for a third day versus the yen on speculation the European Central Bank will have to keep borrowing costs lower for longer to help spur a recovery. The Dollar Index rose to a five-month high before the release of U.S. leading indicators and a regional manufacturing gauge that may add to evidence the economy is gathering momentum. The pound slid to a 2 1/2-year low against the dollar.

“The outlook in the euro area remains weak,” said Melinda Burgess, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in London. “ECB policy will have to be looser and this will weigh on the euro.”

The euro fell 0.7 percent to $1.3185 at 7:01 a.m. New York time after dropping to $1.3168, the lowest level since Jan. 10. The common currency dropped 1.5 percent to 122.44 yen. The yen strengthened 0.7 percent to 92.88 per dollar.

RBS forecasts the euro will decline to $1.30 by the end of March and as low as $1.19 over the coming year, Burgess said.

The Dollar Index (DXY), which IntercontinentalExchange Inc. uses to track the greenback versus the currencies of six U.S. trading partners, gained 0.4 percent to 81.375 after rising to 81.508, the highest level since Sept. 5.

Industrial Output….”

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“The Australian dollar declined, following yesterday’s biggest one-day drop in almost a month, as Asian stocks extended equity losses worldwide, curbing demand for higher-yielding assets.

The so-called Aussie slid versus its Japanese counterpart following a global commodities rout.New Zealand’s currency, known as the kiwi, dropped for a second day after central bank Governor Graeme Wheeler said yesterday he’s ready to intervene in foreign-exchange markets, prompting a surge in the local dollar’s volatility to a five-month high. Both South Pacific currencies fell as China told local authorities to “decisively” curb real estate speculation.

“There’s a bit of negative risk sentiment out there, so Aussie and kiwi have come under some pressure,” said Peter Dragicevich, a Syndey-based currency economist at Commonwealth Bank of Australia, the nation’s largest lender. “We expect them to bounce back over the next week or so.”

The Australian dollar lost 0.2 percent to $1.0233 as of 4:46 p.m. in Sydney after declining 1 percent to $1.0256 yesterday in the biggest drop since Jan. 24. The Aussie will rebound to $1.08 by Dec. 31, Dragicevich said. It bought 95.62 yen from 95.97 in New York.

Australia’s 10-year yield fell five basis points, or 0.05 percentage point, to 3.54 percent after touching a nine-month high of 3.61 percent yesterday.

The MSCI Asia Pacific Index (MXAP) of shares declined 1.6 percent. The Standard & Poor’s 500 Index tumbled 1.2 percent in New York yesterday, the largest drop since Nov. 14. The S&P GSCI Spot Index of 24 raw materials lost 1.1 percent, the most since Dec. 6, while the Thomson Reuters/Jefferies CRB Index declined 0.6 percent yesterday.

Volatility Spike…”

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“The pound slumped to a 15-month low against the euro after the Bank of England minutes showed more officials voted to expand asset purchases at this month’s meeting, a policy that that typically debases a currency.

Sterling dropped to the lowest level since June versus the dollar after minutes of the central bank’s Feb. 7 meeting showed policy makers also considered an interest-rate cut. GovernorMervyn King and Paul Fisher joined David Miles in voting to increase the target for bond purchases by 25 billion pounds ($38.3 billion) to 400 billion pounds, though they were outvoted by the remaining six members of the Monetary Policy Committee. U.K. government bonds declined.

“The market clearly has sterling in the cross hairs,” said Gavin Friend, a foreign-exchange strategist at National Australia Bank Ltd. in London. “King and Fisher have joined Miles in voting for more quantitative easing and the market has thumped sterling on the back of that.”

The pound depreciated 0.8 percent to 87.50 pence per euro at 11:21 a.m. London time, and reached 87.65 pence, the weakest level since October 2011. Sterling fell 0.8 percent to $1.5308, after sliding to $1.5295, the lowest since June 1.

The vote marks the fourth time King, who is retiring in June and will be replaced by Mark Carney, has been outvoted as governor of the London-based central bank….”

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“German Chancellor Angela Merkel dismissed attempts to manipulate exchange rates, saying the present value of the euro against the dollar is within the currency’s normal range.

Merkel, speaking in Berlin today, acknowledged concerns over the euro’s strength in southern European countries which have been “at pains to lower their labor unit costs in a fixed exchange rate regime” only to see the gains “melt away like the snow in the sun under certain conditions.”

“On the other hand, we have to say that euro exchange rates between $1.30 and $1.40 are part of the normality of the history of the euro,” she told an event marking 50 years of the German government’s council of economic advisers.

The euro bought $1.3375 as of 12:57 p.m. in Berlin.

Merkel expressed concern last month over Japanese moves toward monetary easing. Officials from the Group of 20 nations meeting in Moscow last week pledged not “to target our exchange rates for competitive purposes,” without singling out Japan for allowing the yen to decline….”

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“Prime Minister Shinzo Abe will be accompanied by his top currency official when he visits the U.S. to meet with President Barack Obama, as Japan tries to limit international friction over a weakening yen.

Vice Finance Minister Takehiko Nakao is part of a delegation arriving in Washington tomorrow, according to two officials with knowledge of the matter who asked not to be named because of government policy. Usually, a more junior official, the director-general of the international bureau, would accompany Abe on such a trip, two officials said.

Abe’s first visit to the U.S. since becoming prime minister in December comes amid international concern at the speed of the yen’s decline and Japanese officials indicating acceptable levels for the currency. U.S. Treasury Undersecretary Lael Brainard has welcomed Japan’s efforts to “reinvigorate growth,” while saying that nations need to avoid “loose talk about currencies.” …”

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“New Zealand’s dollar weakened the most in two months as the central bank said it’s ready to intervene in the market, a week after the Group of 20 nations vowed to refrain from currency wars. European stocks and U.S. equity-index futures were little changed.

The so-called kiwi depreciated 1.2 percent to 83.68 U.S. cents at 7:25 a.m. in New York. The pound slid 0.9 percent to $1.5295 after the Bank of England said three of nine policy makers voted to expand asset purchases at their meeting this month. The Stoxx Europe 600 Index slipped 0.2 percent and Standard & Poor’s 500 Index futures lost less than 0.1 percent. Soybeans climbed for a third day and European Carbon permits rebounded after falling 20 percent yesterday.

New Zealand’s Reserve Bank Governor Graeme Wheeler said today in Auckland that he’s “prepared to intervene to influence the kiwi” and that the currency isn’t a one-way bet. The Commerce Department may say U.S. housing starts cooled in January from a four-year high, while the European Commission’s index of consumer confidence probably rose, according to Bloomberg surveys of economists. The Federal Reserve releases minutes of its January meeting.

“It’s interesting that the RBNZ have upped the rhetoric around the potential for intervention,” said Geoff Kendrick, head of European currency strategy at Nomura International Plc in London. “This is the first time Wheeler has laid his cards on the table and talked the currency down.”

Kiwi Rally

The so-called kiwi dollar surged 45 percent against the dollar since the end of 2008, the biggest advance after its Australian counterpart among more than 150 currencies tracked by Bloomberg. The kiwi lost as much as 1.3 percent today, the most since Dec. 21. New Zealand isn’t a member of the G-20….”

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“The yen strengthened for the first time in three days against the dollar and euro as Japanese finance minister Taro Aso said the government doesn’t intend to buy foreign bonds to end deflation by weakening the currency.

The yen rose from near the weakest since May 2010 versus the U.S. currency as his comments countered those of Prime Minister Shinzo Abe who said yesterday purchasing overseas bonds “exists as one idea” for monetary policy. South Africa’s rand fell for a third day as clashes between labor unions at a mine spurred concern of a repeat of violence that curbed production last year. Australia’s dollar strengthened as the central bank said an improved global outlook boosted commodity prices.

“The market is paring back more aggressive expectations in terms of Bank of Japan policy easing going forward,” said Lee Hardman, a foreign-exchange strategist at Band of Tokyo- Mitsubishi UFJ Ltd. in London. “Further easing from the BOJ is likely to come in the form of domestic instruments. We could be moving to a period of more stability for the yen after a sharp adjustment lower in the past three months.”

The yen gained 0.5 percent to 93.52 per dollar at 7:44 a.m. in New York after sliding to 94.46 on Feb. 11, the weakest level since May 5, 2010. Japan’s currency advanced 0.6 percent to 124.73 per euro. The euro fell 0.1 percent to $1.3337.

Japanese officials have toned down calls for a weaker yen to help exporters after trade partners complained the nation risked setting off a currency war. Since Abe called for unlimited money printing by the central bank when he was opposition leader on Nov. 15, the yen has slid 13 percent against the dollar, the biggest drop among the major currencies.

End Deflation…”

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“Group of 20 finance chiefs shifted toward a tougher stance on exchange rates as they sought to tame speculation of a global currency war without singling out Japan for criticism.

After all-night negotiations in Moscow, the club of the biggest developed and emerging economies agreed not to “target our exchange rates for competitive purposes,” according to an official who saw a draft of a statement to be released today and asked not to be identified because the document isn’t public yet. That marks a strengthening of language from previous drafts and runs closer to what the Group of Seven rich nations said earlier this week.

“It was quite clear last night that everyone around the table wants to avoid any sort of currency disputes,” Canadian Finance Minister Jim Flaherty told reporters today. U.K. Chancellor of the Exchequer George Osborne said countries must avoid their past mistake of using currencies “as a tool of economic warfare.”

Policy makers are attempting to soothe concern that governments are increasingly trying to weaken exchange rates to spur growth through exports. The risk is a 1930s-style spiral of devaluations and protectionism if other countries retaliate to safeguard their own economies.

Yen Decline…”

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There’s plenty of evidence supporting the belief that the dollar’s days as the preeminent currency are coming to an end, a development that would be catastrophic for the world’s largest economy.

“Generally speaking, it is not believed by the vast majority that the American dollar will be overthrown,” Dick Bove, vice president of equity research at Rafferty Capital Markets, said in a note obtained by CNBC. “But it will be, and this defrocking may occur in as short a period as five to 10 years.”

The greenback is declining as a percentage of the world’s currency supply. Compared with its peers, it has dropped to a 15-year low, as nations show a willingness to use other currencies to conduct business, according to the International Monetary Fund….”

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“The yen strengthened for a fourth day against the dollar and the euro weakened as Group of 20 finance chiefs and central bankers met in Moscow. U.S. equity- index futures pared declines before reports on manufacturing and consumer confidence.

Japan’s currency gained 0.2 percent versus the dollar at 7:05 a.m. in New York. The euro retreated 0.3 percent to $1.3222. Standard & Poor’s 500 Index futures slid 0.1 percent and the Stoxx Europe 600 Index swung between gains and losses. Yields on Germany’s 10-year bunds fell for a second day, dropping two basis points to 1.62 percent. Oil declined 0.5 percent in New York, while wheat rose 0.7 percent on increased U.S. exports.

“What we’re seeing right now is a bit of a fright with the G-20 meeting happening in Moscow,” said Sonja Marten, a currency strategist at DZ Bank AG in Frankfurt. “The trend is going to resume and dollar-yen is going to go back up quite possibly next week once the G-20 is behind us.”

Japan’s ruling party lawmaker Kozo Yamamoto said that a race to devalue currencies would spur global growth and a rate of 95 yen to 100 yen per dollar would be appropriate. European Central Bank council member Jens Weidmann said an appreciating euro alone won’t trigger a cut in interest rates. Reports today will probably show U.S. industrial output and consumer confidence increased while manufacturing in the New York region contracted for a seventh month, according to economists surveyed by Bloomberg.

Yen Gains…”

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“New Zealand’s dollar touched a 2 1/2-year high against Australia’s as the smaller nation’s retail sales grew faster than economists predicted, boosting bets its central bank will raise interest rates.

The so-called kiwi climbed to its strongest in 17 months against the greenback as non-resident holdings of the nation’s sovereign debt rose to the most since October 2009. The Australian and New Zealand dollars are both poised to gain against the U.S. currency this week as speculation global growth will quicken boosts demand for higher-yielding assets.

“The New Zealand economy is in recovery and outperforming its peers, and the kiwi dollar is likely to push higher,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “The Reserve Bank has a mild tightening bias, and in a world of easy policy and quantitative easing, a tightening bias is all you need to stand out from the pack.”

New Zealand’s currency traded at NZ$1.2180 per Aussie dollar at 4:52 p.m. in Sydney, after climbing to NZ$1.2143, the highest since July 2010. It added 0.1 percent to 85.12 U.S. cents after touching 85.34, the most since September 2011. The kiwi advanced 1.9 percent against the greenback this week. It lost 0.3 percent to 78.81 yen today.

Australia’s dollar rose 0.1 percent to $1.0366, poised for a 0.5 percent weekly advance. It slid 0.2 percent to 95.98 yen and has gained 0.4 percent this week.

The New Zealand dollar’s trade-weighted index rose as much as 0.5 percent to 77.50, the highest since it was freely floated in 1985.

Swap Rates…”

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“Japanese ruling party lawmaker Kozo Yamamoto said a race to devalue currencies would spark global growth, dismissing German criticism of Prime MinisterShinzo Abe’s plans for monetary easing which have weakened the yen.

Yamamoto, a member of the Liberal Democratic Party who is close to Abe, said in an interview yesterday that an exchange rate of 95-100 yen to the dollar would be appropriate. The yen has fallen almost 10 percent against its U.S. counterpart since Abe’s LDP won a landslide victory on Dec. 16.

Abe has pushed the Bank of Japan to increase monetary stimulus to overcome more than a decade of deflation. While his administration argues the yen’s fall is a consequence, not a target of his policies, the decline has sparked criticism from German officials including Michael Meister, the parliamentary finance spokesman for Chancellor Angela Merkel’s party.

There is “no problem at all” with the yen falling because of monetary easing, Yamamoto said, citing the research of Columbia University professor Jeffrey Sachs and Koichi Hamada, an emeritus professor at Yale who is an economic adviser to Abe. “It contributes to the stability of the entire economy and to growth,” he said.

The yen weakened after publication of Yamamoto’s comments, before resuming gains to trade 0.4 percent higher at 92.46 per dollar as of 1:11 p.m. in Tokyo.

Germany’s Meister expressed concern in a Jan. 22 interview, saying that competitive devaluation could “create a spiral that hurts us all.” Finance MinisterWolfgang Schaeuble and Bundesbank President Jens Weidmann have also criticized Abe’s policies.

Yen’s Equilibrium…”

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“The euro slid to a three-week low against the dollar after a report showed Europe’s recession deepened more than economists forecast last quarter, sapping demand for the region’s assets.

The 17-nation currency dropped for a third day versus the yen as separate data showed gross domestic product shrank in both Germany and France. The yen rose against most of its major counterparts as Russia’s finance minister said Group-of-20 nations should take a stronger stance against currency manipulation. New Zealand’s dollar climbed to a 17-month high after manufacturing expanded. The euro has still strengthened 4.6 percent against the dollar in the past three months.

“They’re pretty awful figures” in Europe, said Neil Mellor, a foreign-exchange strategist at Bank of New York Mellon Corp. in London. “It could get a lot worse because the euro has risen a long way since the start of the fourth quarter.”

The euro slumped 0.9 percent to $1.3334 at 7:27 a.m. New York time after falling to $1.3315, the lowest level since Jan. 24. The shared currency slid 1 percent to 124.43 yen. The yen strengthened 0.1 percent to 93.21 per dollar.

The currencies of euro-area neighbors also weakened, with the Hungarian forint, Czech koruna and Polish zloty all sliding at least 0.9 percent versus the dollar.

Gross domestic product in euro area fell 0.6 percent from the previous three months, the European Union’s statistics office said. That’s the worst performance since the first quarter of 2009 and exceeded the 0.4 percent median forecast of economists in a Bloomberg News survey.

Negative Rates…”

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“Group of 20 nations should take a stronger stance against currency manipulation at their meeting in Moscow, Russian Finance Minister Anton Siluanov said after conflicting statements on the weakening yen roiled markets.

Russia wants more “specific” language opposing exchange- rate interference in the communique that will be issued after talks among finance chiefs this week, Siluanov said in an interview today with Bloomberg Television’s Ryan Chilcote. Russia holds the G-20’s rotating presidency this year.

“The G-20 countries have always held the position that currency policy should be based on market conditions,” Siluanov said. “I think we should take a more specific stance on this.”

Russian central bank First Deputy Chairman Alexey Ulyukayevwarned last month that the world was nearing the brink of a fresh “currency war” as countries weaken their currencies to make their exports more competitive. The yen has tumbled 17 percent in the past three months against the dollar. Financial markets whipsawed two days ago as the Group of Seven major industrialized countries issued a statement viewed by investors as accepting a declining yen, only for officials to then split over whether Japan was being singled out.

Yen Tolerance…”

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