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The euro weakened versus the dollar for the first time in five days as the German Bundesbank said growth in Europe’s largest economy will probably slow, prompting traders to reduce bets the European Central Bank will increase interest rates.
Europe’s common currency snapped four days of gains against the yen. German growth is “likely to ease somewhat in the foreseeable future,” the Frankfurt-based Bundesbank said in its monthly bulletin published today. The krone climbed against the euro as Norges Bank Governor Oeystein Olsen said Norway’s currency may appreciate further as growth accelerates.
“Any kind of sign that growth is slowing in the euro zone, people are overreacting and that’s why we’ve seen this sell- off,” said London-based Kathleen Brooks, research director at Forex.com, a unit of online currency trading company Gain Capital Holdings Inc. “People were looking for any excuse to sell the euro and book a bit of profit.”
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