Slowing economies hurt euro, pound

Story link: Slowing economies hurt euro, pound

The euro and the pound both weakened versus the US dollar Wednesday after both the German and UK economies showed signs of slowing further.

The German economy contracted by 0.5 percent in the second quarter of the year, the first time that has happened in four years, while in the UK the minutes of the most recent meeting of the Bank of England’s Monetary Policy Committee revealed that the vote to hold interest rates steady was split between those wanting to hold rates at 5 percent, one hoping for a rate increase and one wanting a cut in rates.

The minutes also indicated that risks for inflation in the UK have likely eased a bit.

In morning trade in New York the dollar traded at $1.4750 to the euro and at $1.8619 to the pound.

The euro also declined in relation to the Canadian dollar and the Mexican peso, to C$1.5688 and 14.944 pesos.

The Canadian dollar saw gains on new data showing that retail sales were up 0.5 percent in June.

The yen, meanwhile, declined versus the US dollar before taking back some losses, with the Japanese currency worth ¥109.7700 at nearly 11 a.m. in New York while at the same time the yen traded at ¥161.9108 to the euro.