Senin, 12 Desember 2011

Euro Falls After Moody’s Says Summit Offered Few New Measures

Dec. 12 (Bloomberg) -- The euro fell the most in two weeks versus the dollar as Moody’s Investors Service said it will review the ratings of European Union nations after last week’s summit failed to produce decisive steps to end the debt crisis.

The dollar and yen strengthened against a majority of their most-traded counterparts as investors sought safer assets on concern crisis-fighting efforts are failing to stop European borrowing costs from rising. Sweden’s krona weakened as stocks declined amid reduced demand for higher-yielding investments. China’s yuan appreciated after the nation’s central bank signaled the currency will be allowed to trade more freely.

“The summit didn’t provide any closure,” said Mark McCormick, a currency strategist at Brown Brothers Harriman & Co. in New York. “Another development in Europe surrounding the ongoing euro-zone debt crisis is just bringing down everything that’s correlated with Europe.”

The euro fell 1.1 percent to $1.3235 at 8:42 a.m. in New York, the most since Nov. 23. The currency slid 0.8 percent to 103.11 yen, and declined 0.8 percent to 84.78 U.K. pence after reaching 84.75 pence, the lowest level since March 2. The dollar advanced 0.3 percent to 77.90 yen.

Euro Path

The euro has fallen 1.4 percent in the past month, the biggest loser among 10 developed-nation currencies according to Bloomberg Correlation-Weighted Indexes. The dollar gained 2.8 percent, the best performer, and the yen advanced 1.8 percent.

Italian bonds slid as the nation sold 7 billion euros ($9.3 billion) of one-year bills to yield 5.95 percent, compared with an average 2.70 percent in the past five years. The securities fell even after the European Central Bank was said to have bought the nation’s debt. Italy has to repay about 53 billion euros in the first quarter, about a third of the region’s maturing bonds.

Sweden’s krona fell to the weakest this month versus the dollar as the Stoxx Europe 600 Index slid 0.9 percent.

“The Swedish krona is a very cyclical currency and we have a bit of risk aversion in the equity market today, which adds to its downside,” said Niels Christensen, chief currency strategist at Nordea Bank AB in Copenhagen.

Krona Drops

The krona dropped 1.6 percent to 6.8323 per dollar after sliding to 6.8266, the weakest since Nov. 30. It depreciated 0.5 percent to 9.0490 per euro.

South Africa’s rand dropped the most against the dollar among the 16 major currencies tracked by Bloomberg. It lost 2 percent to 8.2556 per dollar.

The yuan rose after the Financial News reported Xuan Changneng, head of the People’s Bank of China’s financial stability bureau, as saying policy makers will maintain flexibility while pushing forward with interest-rate and exchange-rate reform.

“The PBOC’s comment quelled investors’ depreciation expectations after the weaker export growth,” said Kenix Lai, a currency analyst at Bank of East Asia Ltd. in Hong Kong “The stronger fixing also shows that China will still allow gains in the currency, even though the pace may slow.”

The yuan gained 0.06 percent to 6.3606 per dollar, after falling 0.08 percent last week.

European Plan

European leaders unveiled a blueprint after meetings on Dec. 8 and 9 for a closer fiscal accord, adding 200 billion euros to their bailout fund and tightening rules to curb future debts. They also said they would start a 500 billion-euro rescue fund next year.

The agreement offered few additional measures and doesn’t diminish the risk of credit-ranking revisions, Moody’s said in its Weekly Credit Outlook. “Our intention as announced in November is to revisit the level and dispersion of ratings during the first quarter of 2012,” the company said.

“Moody’s captures the mood,” said Kit Juckes, head of foreign-exchange research at Societe Generale SA in London. “The market is disappointed that nothing more substantial was agreed” at last week’s European Union summit. “There are no convincing reasons for anyone to want to own the euro today.”

Standard & Poor’s put the EU’s AAA rating on “creditwatch negative” last week after similar action on 15 of the 17 euro nations, pending the outcome of last week’s summit and the actions of central bankers.

Market Forecast

The single currency may depreciate toward $1.3145, which would be the weakest since January, Juckes said.

Foreign-exchange strategists are slashing their forecasts for the euro at the fastest pace this year as ECB President Mario Draghi’s interest-rate cuts remove one of the currency’s pillars of support.

Since Nov. 3, when Draghi began to undo the rate increases implemented earlier this year by his predecessor, Jean-Claude Trichet, analysts have reduced end-of-2012 estimates for the euro to $1.32 from $1.40, based on the median of 40 forecasts in a Bloomberg survey as of last week. It has weakened versus every major currency except the Swiss franc since then, after gaining against 12 of the 16 this year prior to that.

“There still has to be further monetary easing by the ECB to support growth in the euro area for 2012 and beyond,” Ken Dickson, investment director of currencies at Standard Life Investments in Edinburgh, which manages about $235 billion, said in a Dec. 9 telephone interview.

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