RTTNews - The euro saw weakness on Thursday in New York as falling global stocks led to risk aversion. Investors also mulled over the European Central Bank's widely-expected decision to leave interest rates the same.
The ECB left its key interest rate at a record low of 1% for the second straight month as the 16-nation economy faces its worst recession since the World War II.
In his accompanying statement, European Central Bank President Jean-Claude Trichet said that recent data releases provide further indications that economic activity over the remainder of this year is likely to remain weak but should decline less strongly than in the first quarter of 2009.
Stocks were dragged lower as the U.S. Labor Department released a report on Thursday showing that employment fell by much more than expected in the month of June, pushing the unemployment rate up to a new 25-year high.
The euro slipped below 1.4000 versus the dollar for the first time in a week, adding to weakness seen yesterday. The European currency had hit a 25-day high of 1.4188 early yesterday before heading lower.
Data showed that U.S. non-farm payroll employment fell by 467,000 jobs in June following a revised decrease of 322,000 jobs in May. Economists had been expected a decrease of about 365,000 jobs compared to the loss of 345,000 jobs originally reported for the previous month.
The euro slipped away from a three-week high against the British pound, falling to 0.8542 in the early afternoon. Earlier this week, the European currency reached as high as 0.8628.
Thursday, the new Bank of England policymaker David Miles said it is unlikely that there will be a rapid return to growth in the UK economy.
The euro dropped away from a two-week high versus the Japanese yen, falling to 134.55 in the early afternoon. The common currency reached as high as 136.88 earlier this week.
In other economic news, the Eurostat said in a report that Eurozone industrial producer prices dropped 5.8% year-over-year in May, compared with a 4.6% fall in the previous month.. Economists had expected a decline of 5.6%.
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