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On Monday the euro rose for a second day versus the dollar as traders said the shared currency’s decline may have been too quick after European leaders agreed to discuss closer banking cooperation in the euro bloc. European Commission President Jose Barroso and German Chancellor Angela Merkel agreed to discuss proposals on banking coordination when they meet in Berlin. The commission, the European Union’s executive, last week called for a “banking union” that would integrate supervision of lenders more tightly and create a pool of EU funds to clean up banks with cross-border exposure. The Brussels-based commission also proposed that the euro’s permanent bailout fund inject cash to banks instead of channeling the money through national governments.
On Tuesday the yen weakened against the dollar for a second day after Japanese Finance Minister Jun Azumi indicated that Group of Seven nations remain supportive of intervention to address extreme currency moves.
After reaching its weakest level against the dollar on March 15, the yen had strengthened as much as 7 percent. Japan’s Azumi said he told finance ministers a strong yen was depressing the nation’s stock market and damaging its economy by making exports more expensive.
On Wednesday the euro rose for a fourth day against the yen as European Central Bank president Mario Draghi said policy makers were “ready to act” after leaving their benchmark rate at a record low. The ECB’s Draghi told a press conference in Frankfurt that officials will extend their offerings of unlimited cash to banks until the start of 2013 for periods up to three months as they endeavor to counter risks stemming from the region’s debt crisis. The 17-nation euro strengthened to almost a one-week high against the dollar amid speculation the world’s leading economies will collaborate on a response to Europe’s debt crisis.
On Thursday the yen fell against all its major counterparts after China cut its key interest rates for the first time since 2008, damping appetite for refuge assets. China’s benchmark one-year deposit rate will drop by 0.25 percentage point effective tomorrow, the People’s Bank of China said on its website. The one-year lending rate will also be cut by 0.25 percentage point, it said.
On Friday the euro weakened for a second day against the dollar as Spain was poised to become the fourth of the 17 euro countries to require emergency assistance. The 17-nation euro fell for the first time in six days versus the yen as the currency bloc’s finance chiefs plan weekend talks on a potential Spanish aid request to shore up the nation’s lenders. German exports, adjusted for work days and seasonal changes, slid 1.7 percent in April from a month earlier, when they gained 0.8 percent, the Federal Statistics Office in Wiesbaden said. Economists forecast a drop of 0.7 percent. Italian output declined 1.9 percent from March, when it rose a revised 0.6 percent, the national statistics office said in Rome. Production slid 9.2 percent from a year ago on a workday-adjusted basis.
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