Euro Slips Against Yen

The euro dropped for a fourth day against the yen as business confidence in Germany, Europe's largest economy, fell the most since the 2001 terrorist attacks.

The euro slid to $1.5677 as of 6:50 a.m. in New York, from $1.5698 yesterday, and traded at $1.5638, the weakest since July 8. It declined to 168.95 yen, from 169.36 yesterday, when it traded at a record high of 169.96. The dollar was at 107.77 yen, from 107.90 yesterday. It earlier reached 107.99, the highest since June 26.

The euro will fall to $1.50 by the end of the third quarter, according to RBS.

The euro fell for a third day versus the dollar and a fourth day versus the yen after the Ifo institute said its business climate index, based on a survey of 7,000 executives, dropped to 97.5, the weakest since September 2005, from 101.3 in June. Economists expected a drop to 100.1, according to the median of 40 forecasts in a Bloomberg News survey.

Traders pared bets the ECB will increase interest rates a second time this year, with the implied yield on the December Euribor futures contract falling 8 basis points to 5.13 percent today. The Frankfurt-based central bank raised its key rate to a seven-year high of 4.25 percent on July 3.

Euro Slips Against Yen, Bloomberg
7/24/2008 6:49:25 AM