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The euro declined to a two-week low versus the dollar after a report showed the region’s economy contracted last quarter, adding to signs the European debt crisis is hampering global growth. Europe’s gross domestic product shrank 0.3 percent from the third quarter, the region’s statistics office said today, confirming an initial estimate published on Feb. 15. Exports fell 0.4 percent and household spending declined 0.4 percent. The ECB will keep its benchmark interest rate t a record low 1 percent on March 8. The euro dropped as Greece struggles to complete a bond exchange with private investors by March 8 in order to receive a 130 billion-euro ($171 billion) bailout.
The yen rose against all its major counterparts and gained for a fifth day against the 17-nation currency as 20 percent of Greece’s private creditors have agreed to debt restructuring. The yen rose against the dollar for a second day as it rebounded from oversold levels for the first time in 13 days. Its 14-day relative strength index advanced above the 30 level, which indicates an asset may have declined too far, too quickly, for the first session since Feb. 16.
Australia’s dollar fell to a five-week low after the central bank left its benchmark rate at 4.25 percent and reiterated it has scope to ease monetary policy if needed. The Reserve Bank of Australia said in a statement that while current settings are “appropriate for the moment,” there is scope for easier policy if demand weakens “materially.”
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