RTTNews - The euro slipped against the yen and pound as investors mulled over gross domestic product and industrial data from the Eurozone that came in worse than expected. The common currency gained versus the dollar following a disappointing employment report form the U.S.
The Eurozone economy contracted 0.1% sequentially in the second quarter, following a 2.5% fall in the first quarter, the Eurostat said Wednesday.
Compared to previous year, seasonally adjusted GDP dropped 4.7% in the second quarter, revised from 4.6% estimated initially. In the first quarter, GDP slipped 4.9%.
Meanwhile, the Eurostat also said in a report that Eurozone industrial producer price index or PPI dropped 8.5% year-over-year in July, compared with a 6.5% fall in the previous month. The June month figure was revised from 6.6% decline reported initially. Economists expected a decline of 8.4%.
Meanwhile, the International Monetary Fund may adjust its global growth forecast for 2010 to just below 3%, reports said Tuesday, citing a senior economist at the lender. Jorg Decressin said the IMF is set to release its new forecasts on October 1.
The euro climbed off a two-week low against the U.S. dollar. The common currency rose toward 1.4300 after hitting as low as 1.4188 last night.
Automatic Data Processing reported non-farm private employment fell by 298,000 jobs in August following a revised decrease of 360,000 jobs in July. Economists had expected a decrease of about 246,000 jobs compared to the loss of 371,000 jobs originally reported for the previous month.
The euro fell against the British pound, reaching a weekly low of 0.8746. The European currency hit as high as 0.8838, its best level since early June.
The UK government is set to provide the International Monetary Fund with an amount equivalent to US$15.5 billion, based on an agreement signed with the lender on Tuesday, which would add to the Fund's total lending capacity. This is in line with the commitment made by the European Union in March to contribute up to US$100 billion to the Fund, to support lending capacity.
The euro fell to a six-week low of 1.3101 against the Japanese yen. The 16-member currency has been trending lower throughout the week on lower risk appeal, with global stocks falling.
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