Euro Falls on Poor Industrial Production Data

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Tradervox.com (Dublin) - The 17-nation currency tumbled for the first time in four days against the yen after the region’s factory output dropped more in September than economists forecast, adding to signs the recovery is stalling. The common currency fell versus all except three of its 16 major counterparts before a report tomorrow that analysts said will show gross domestic product growth slowed in the third quarter. The pound strengthened after the Bank of England improved its outlook for unemployment. The yen advanced as European and Asian stocks declined, spurring demand for safer assets.

According to Alvin Tan, the euro is a sell on rallies as the recovery in the euro area is particularly strong and expects the GDP data tomorrow to show growth momentum is definitely slackening. He predicted that this will put downward pressure on the euro.

The euro fell 0.2 percent to 133.59 yen at 6:09 a.m. in New York after strengthening 1.7 percent in the previous three days. The common currency declined 0.1 percent to $1.3420. The yen gained 0.1 percent to 99.55 per dollar after sliding to 99.80 yesterday, the weakest level since Sept. 13.

Factory production in the euro area dropped 0.5 percent in September after rising 1 percent the previous month, data from Eurostat showed today. Economists in a survey predicted a decline of 0.3 percent. The region’s GDP expanded 0.1 percent in the third quarter, from 0.3 percent in the previous three months, a separate survey showed.

The euro gained 6.4 percent this year, the best performer of 10 developed-nation currencies tracked by Correlation-Weighted Indexes. The dollar rose 4.4 percent and the yen tumbled 10 percent. The yen advanced today as the MSCI Asia Pacific Index of shares declined 1 percent and the Stoxx Europe 600 Index of equities dropped 0.6 percent.

The pound climbed at least 0.2 percent versus all of its 16 major counterparts after the Office for National Statistics said the jobless rate as measured by International Labour Organisation standards fell to 7.6 percent in the three months through September.

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