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The euro dropped against most of its major counterparts amid bets the European Central Bank won’t restart its government bond-purchase program even as Spanish credit-default swaps rose to a record. The cost of insuring against a Spanish government default rose to a record 498 basis points, according to CMA prices. A basis point on a credit-default swap protecting 10 million euros ($13.1 million) of debt for five years is equivalent to 1,000 euros a year. Swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower fails to adhere to its debt agreements. Europe’s shared currency headed for a second weekly decline against the yen and dollar after Klaas Knot, a member of the ECB governing council, said he didn’t see a “good reason” to buy Spanish securities. Euro slid after a report showed China’s economy expanded less than analysts forecast, adding to bets global growth is slowing.
The Dollar Index rose as U.S. consumer confidence cooled, damping risk appetite. Thomson Reuters/University of Michigan preliminary index of consumer sentiment for April unexpectedly fell to 75.7.
The British pound fell against the dollar after a report showed that producer prices in Britain rose again in March, confirming the stability of the inflationary pressures in the economy. Prices of output rose 0.6% m / m, exceeding the average forecast of 0.5%.Prices rose at the entrance of 1.9%, exceeding the forecast of 1.4%. Producer prices rose the third consecutive month, registering a growth of 6 out of 10 categories. The highest growth was recorded for prices of petrol, tobacco and alcohol. In annual terms, producer prices have increased output by 3.6% in March against 4.1% in February.
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