The euro extended a
drop from Friday, the biggest in three weeks, as traders anticipated
European Central Bank officials will continue to flag a readiness to
ease monetary policy amid the risk of slower growth and inflation.
Europe’s common
currency slid on Friday as Benoit Coeure, an ECB Executive Board member,
emphasized that U.S. and Europe’s policy trajectories will “remain very
different,” even after the Federal Reserve refrained for increasing
interest rates last week. His peers Ewald Nowotny and Peter Praet are
scheduled to speak on Monday. Euro declines may be limited after Alexis
Tsipras was returned to power in Greece following an emphatic election
victory, keeping the nation’s reform agenda on track before an
international review due by year’s end.
The common currency
was at $1.1296 as of 8:11 a.m. in Singapore after dropping 1.2 percent
to $1.1298 on Friday. It was little changed at 135.52 yen. The dollar
fetched 119.96 yen from 119.98. Japanese markets are closed for holidays
on Monday through Wednesday.
While the Fed on
Thursday held off, Chair Janet Yellen said most officials still expect
to tighten borrowing costs this year for the first time in almost a
decade. Futures indicate a 46 percent chance of an increase in December,
a 53 percent probability of a January move and 67 percent odds the Fed
will raise its benchmark in March.
Analysts say the delay
could add to pressure on the ECB to expand its quantitative-easing
program to counter a stronger euro and weaker global demand.
The euro has climbed
3.4 percent in the past three months, according to Bloomberg
Correlation-Weighted Indexes. The dollar has climbed 4.1 percent and the
yen is up 6.7 percent over that period.
Hedge funds and other
money managers boosted net bearish bets on the euro for the third week
in the period ended Sept. 15 to 84,202 contracts from 81,241, according
to data from the Commodity Futures Trading Commission.
Source: Bloomberg
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