The euro fell to a one-month low against the dollar and weakened against the yen on concern the European economy will deteriorate as central bank officials disagree on the measures needed to combat the recession.
The yen rose versus all of the 16 most-active currencies as speculation the global slump will deepen spurred investors to cut holdings of higher-yielding assets. The Dollar Index approached the highest level in three weeks on prospects a U.S. report today will show a gauge of the economy’s outlook improved. The South Korean won was the biggest decliner against the greenback as importers may be taking advantage of six weeks of gains to pay their bills.
“Investors fear that European policy makers aren’t doing enough to safeguard the economy,” said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Any sign that the euro zone economy is deteriorating will likely add to the downward pressure on the euro.”
The euro dropped to $1.3007 as of 1:26 p.m. in Tokyo from $1.3044 in New York on April 17. It earlier declined to $1.2967, the lowest level since March 17. Europe’s currency fell to 128.55 yen from 129.33 yen, after touching 128.17, the weakest since March 30.
The yen climbed to 98.82 per dollar from 99.16 last week. It advanced to 56.02 versus the New Zealand dollar from 56.32, and rose to 71.02 versus the Australian currency from 71.64. The won declined 0.7 percent to 1,341.35 per dollar.
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