Euro Falls Against Dollar, Yen


The euro fell against the dollar and the yen after retail sales unexpectedly dropped and Bayerische Landesbank reported 4.3 billion euros ($6.7 billion) in writedowns from the collapse of the subprime-mortgage market.

The euro weakened versus all of the most-actively traded currencies after a European Union report showed retail sales declined 0.5 percent in February, pointing to a slowdown in the region and adding to pressure for interest-rate cuts. BayernLB's writedown was double its previous estimate and the biggest of any German state bank.

The euro declined to $1.5539 at 6:33 a.m. in New York, from $1.5686 yesterday, when it rose 0.5 percent. It fell to a five- week low against the Japanese yen of 161.07 before trading at 159.79. Against the British pound, the euro slid to 78.45 pence from 78.92 pence.

The decline in European retail sales reversed the previous month's increase, data from the EU statistics bureau in Luxembourg showed. The region's biggest economy, Germany, registered a 1.6 percent drop. The ECB has room to lower interest rates because economic growth is slowing ``sharply,'' the International Monetary Fund said yesterday.


TradingEconomics.com, Bloomberg
4/3/2008 6:27:52 AM