The currency is also poised to drop this week versus the yen after a contraction in regional manufacturing prompted traders to pare bets for a rate increase on June 25. The euro was set for a sixth weekly advance against the yen, its longest in more than a year, on speculation European Central Bank President Jean-Claude Trichet will signal in a speech today that policy makers may raise borrowing costs next month.
The dollar fell 0.7 percent to $1.5611 per euro at 7:02 a.m. in New York, from $1.5504 yesterday, leaving it 1.5 percent lower than last week. The U.S. currency slipped 0.4 percent to 107.54 yen. The euro rose 0.3 percent to 167.90 yen, poised for a 0.9 percent gain this week.
The dollar may decline to $1.59 per euro by September, Robinson predicted. The U.S. currency slid 2.4 percent versus the euro in the week ended March 28.
The U.S. currency touched a one-month high of $1.5303 per euro last week after Fed Chairman Ben S. Bernanke said on June 9 that economic risk has faded, raising speculation the central bank will increase rates this year to slow inflation.
Money managers are paring their dollar holdings at the fastest pace since March, State Street Corp., the second-largest money manager for institutions, said yesterday.
Futures on the Chicago Board of Trade showed a 12 percent chance the Fed will increase the target rate for overnight lending between banks by a quarter-percentage point on June 25, compared with 22 percent odds a week ago.
The dollar also fell after Moody's Investors Service stripped MBIA Inc. and Ambac Financial Corp. of their top investment-grade rankings yesterday, raising concern about further writedowns.