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Euro Pares Gain After Output Growth Slows; Norway's Krone Climbs - (Bloomberg)

Posted by Chris Advincula on Oct 24, 2013 5:08:00 AM

The euro pared an advance that took it to a two-year high versus the dollar after an industry report showed the region’s manufacturing and services industries expanded less this month than economists forecast.

The 17-nation currency also trimmed gains versus the yen as indexes of service activity in France and Germany both declined. The dollar fell against most of its 16 major counterparts as concern U.S. growth was hampered by a government shutdown earlier this month fueled bets the Federal Reserve will delay reducing stimulus. Norway’s krone advanced as the central bank left its key policy rate unchanged.

“This data is a wake up call, showing that there are events that can still knock the euro,” said Jane Foley, a senior currency strategist at Rabobank International in London. “We’ve seen the euro push higher on the back of dollar weakness and the dollar will remain on the back foot, so the fall in the euro will probably be limited.”

The euro was 0.1 percent higher at $1.3787 at 9:33 a.m. London time after climbing to $1.3822, the strongest since November 2011. The shared currency rose 0.1 percent to 134.22 yen. The dollar was little changed at 97.37 yen after depreciating to 97.16 yesterday, the weakest since Oct. 9.

An index based on a survey of purchasing managers in the euro-area manufacturing and services industry dropped to 51.5 from 52.2 in September, London-based Markit Economics said. That’s below the median forecast of 52.4 in a Bloomberg News survey of economists. A reading above 50 indicates expansion.  

 

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