Euro declines after Trichet comments

Euro declines after Trichet comments

Story link: Euro declines after Trichet comments

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The euro declined in relation to the US dollar and the yen Thursday after European Central Bank President Jean-Claude Trichet said that economic recover will likely to begin in the region until the middle of next year.

Mr. Trichet’s remarks came on the same day that the ECB held interest rates steady at 1 percent for the time being.

At mid-afternoon in New York, the dollar was at $1.4019 to the euro while the yen had advanced to ¥134.2843 versus the shared currency.

The yen was also higher versus the greenback at ¥95.785 to the US currency as a US Labor Department report said that the US lost more jobs than expected last month, limiting investor demand for high-yield, high-risk currency deals often finance by the lower-yielding yen.

The pound also gained on the euro, trading at 85.43p to the shared currency at around 2:30 p.m. in New York, but dropped versus the US dollar at the same time as the greenback traded at $1.641 versus the UK currency.

A survey of sentiment among UK builders hurt the pound as a survey of purchasing managers at construction companies put an index of their sentiment at 44.5 in June, down from 45.9 in May.

Also hurting the pound was testimony of economist David Miles before the Treasury Committee of Parliament, who said that UK banks remain in trouble and that a return to sustained growth seems “unlikely� at this time.