Euro Trades 0.3% From A Two-Week Low Against The Dollar

The euro traded 0.3 percent from a two-week low against the dollar as protests against European austerity measures added to obstacles for leaders seeking to stem the region’s debt crisis. The 17-nation currency held a seven-day decline against the yen, the longest since May, before Spanish Prime Minister Mariano Rajoy submits a fifth package of budget cuts. Demonstrators gathered near parliament in Madrid yesterday, while Greek police in Athens dispersed protesters with tear gas.

The euro traded at $1.2872 as of 8:18 a.m. in Tokyo from $1.2873 yesterday, when it touched $1.2835, the lowest since September 12. Spanish bonds dropped yesterday, sending the yields on 10-year securities above 6 percent for the first time since September 18. Catalan President Artur Mas called early elections for November 25, as Rajoy struggles to gain acceptance for austerity measures and faces criticism from European leaders for delaying a decision on an international bailout to support the nation’s bond market. The euro has weakened 3.5 percent this year, the worst performance after the yen.

GBP/USD
The pound fell 0.19% against the USD and closed at 1.6194. In the UK, the number of mortgage approvals for house purchase rose to 30,533 in August, up from 28,750 in July. Meanwhile, the Bank of England (BoE) Policymaker, Paul Fisher, stated that the BoE’s new scheme to provide banks with cheap funding would boost the supply of credit to the nation’s economy. The pair was expected to find support at 1.6162, and a fall through was to take it to the next support level of 1.613. The pair was expected to find its first resistance at 1.6246, and a rise through was to take it to the next resistance level of 1.6300.

USD/JPY
Japan’s biggest manufacturers probably grew more pessimistic this quarter as China’s slowdown and Europe’s crisis sapped exports, putting pressure on the central bank to add to this month’s surprise monetary stimulus. The bank of Japan’s Tankan report will show in October 1 that its measure of business confidence deteriorated to -4, the fourth straight quarter that pessimists outnumbered optimists.

That would mark the longest string of negative readings since Japan emerged from the global recession in mid-2010. The report may add to risks of the world’s third-largest economy slipping into a contraction in the second half of the year, offering little prospect of the BOJ quelling the nation’s deflation. A separate release in two days may show consumer prices slumped 0.3 percent in August from a year before, compared with the BOJ’s target of 1 percent inflation.

USD/CAD
Canada’s dollar fell to its lowest level in almost three weeks versus its U.S. peer as crude oil slid below $90 after Spanish bond yields surged and unrest continued, reinforcing investor demand for lower-risk assets. The Canadian currency declined for a third day, matching the longest streak in four months, as stocks fell and oil, the nation’s largest export, dropped to the lowest level in seven weeks after a report showed rising U.S. stockpiles.

Government bonds rose for an eighth day as Canada sold two-year debt at a lower yield and with greater demand than at the previous sale of the securities. The so-called loonie weakened after a Federal Reserve official said a new stimulus plan probably won’t boost economic growth in Canada’s largest trade partner. The loonie, as the Canadian currency is known for the image of the aquatic bird on the CAD 1 coin, declined 0.5 percent to 98.55 cents per U.S. dollar in Toronto after touching 98.60, the weakest since Sept. 6.