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The euro headed for its biggest weekly decline this year as signs that Europe’s debt crisis is damping growth curbed demand for the currency. Europe’s shared currency is set for a 1.9 percent slide against the dollar this week, the biggest since the period ended Dec. 16. It has fallen 1 percent versus the yen. The 17-nation euro has fallen versus all but one of its 16 major counterparts since May 18 and before figures next week that may show consumer confidence in the currency bloc was little changed this month, while the jobless rate climbed in April to a 21-year high. A final reading will probably confirm that consumer confidence in the euro area was little changed at minus 19.3 in May from minus 19.9 in the previous month, according to the median estimate in a Bloomberg News survey before the figures are released May 30. The unemployment rate climbed to 11 percent in April, the highest in data compiled by Bloomberg going back to 1990, economist forecasts in a separate poll showed before the June 1 report. A composite index based on a survey of purchasing managers in the services and manufacturing industries in the euro bloc fell to 45.9 in May from 46.7 in the previous month, according to a separate report yesterday by Markit Economics. A reading below 50 indicates contraction.
The yen fell versus the dollar as a report showed consumer prices in Japan, excluding fresh food, climbed 0.2 percent in April from a year earlier, remaining far from the Bank of Japan’s 1 percent inflation target after years of falling prices.
The Dollar Index rose to a 20-month high as investors sought the relative safety of the U.S. currency.
EUR/USD: during the Asian session the pair traded in a range $1.2515-$1.2550.
GBP/USD: during the Asian session the pair traded in a range $1.5645-$1.5670.
USD/JPY: during the Asian session the pair rose to Y79.80.
European data for Friday starts at 0600GMT with German construction orders, shortly followed at 0610GMT by the Gfk measure of German consumer confidence. US data at 1355GMT sees the Michigan Sentiment Index, which is expected to be unrevised at a reading of 77.8, still up from the final April estimate for 76.4. Late data sees the 2015GMT release of US C&I loans data.
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