Euro sinks to 2-month low against the dollar

The Associated Press

May 08, 2008

The euro declined to a two-month low against the dollar in Asia Thursday on speculation that weaker-than-expected euro-zone economic data might make the European Central Bank more pessimistic toward the region's overall economy.

The euro dropped to an intraday-low of $1.5285, its lowest level since March 11, and was at $1.5318 Thursday afternoon, lower than Wednesday's $1.5408 in New York.

The dollar, meanwhile, fell to 103.77 yen in late afternoon trading from 105.26 yen late Wednesday in New York.

Traders said they will closely watch what ECB President Jean-Claude Trichet has to say about the economy in a speech after the bank's policy-setting meeting later in the day.

'The euro-zone retail sales result overnight was a shock to us,' said Jun Kato, a senior dealer at Shinkin Central Bank. 'The result suggests the region's economy may also be slowing down.'

Euro-zone retail sales fell 0.4 percent in March instead of rising 0.2 percent as expected, the European statistics agency Eurostat said.

The euro also declined against the yen, propping up the Japanese currency against the dollar, traders said. The euro was trading down 0.9 percent at 159.64 yen.

The dollar, however, gained against other Asian currencies. It rose more than 1.6 percent to 1,049.5 South Korean won and climbed 0.9 percent to 42.665 Philippine peso.

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