Allison Bennett and Joseph Ciolli | Bloomberg
The euro fell for a fourth straight week against the yen, touching the lowest level in almost 12 years, as signs the European debt crisis is worsening damped demand for the shared currency.
The dollar dropped against most major peers as investors added to bets the Federal Reserve will take new steps to stimulate economic expansion that may debase the currency.
Data next week is forecast to show U.S. growth slowed. Australia’s dollar climbed as implied volatility fell to an almost five-year low and traders sought higher yields, while the euro slid even as European officials approved an aid package for Spanish banks.
“Uncertainty has increased in the region, giving investors another reason to shun the euro,” Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co., said in a telephone interview.
“There’s an underlying hope that we could see another round of global stimulus, which is giving investors a reason to pile into higher-yielding assets.”
The 17-nation currency fell 1.6 percent to 95.43 yen yesterday in New York, from 96.98 yen on July 13. It touched 95.35 yen, the weakest since November 2000. The euro declined for a third week versus the dollar, losing 0.8 percent to $1.2157 and reaching $1.2144 yesterday, its weakest since June 2010.
The yen advanced for a fourth week against the dollar, its longest winning stretch in a year, gaining 0.9 percent to 78.49.
Futures traders added to bets the euro will fall against the dollar, Commodity Futures Trading Commission data showed. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain — so-called net shorts — was 167,249 on July 17, compared with net shorts of 165,705 a week earlier. Net shorts reached a record 214,418 June 8.