Euro down on ECB rate cut talk; yen dips before G20
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The euro suffered its biggest daily decline against the dollar in nearly a year on Wednesday, weakened by talk of a euro zone interest rate cut, while signs of economic malaise in Britain and Canada added to the U.S. currency's appeal.
The yen also slipped against the dollar, with officials at a weekend Group of 20 meeting not expected to scold Japan for a monetary policy that has led to a sharp slide in the currency.
A bigger focus for currency traders on Wednesday was monetary policy in Europe after Jens Weidmann, a member of the European Central Bank's governing council, was quoted by the Wall Street Journal as saying the central bank could cut rates further if conditions in the euro zone worsen.
The euro fell 1.1 percent to $1.3026 after hitting a seven-week high overnight and was on track for its largest one-day slide since June. It fell 0.6 percent to 127.73 yen , moving further away from a three-year high above 131.
Support for the euro lies around $1.3020, traders said, while a break could spark a decline toward $1.30 and $1.29.
Lower rates in Europe and tepid growth in other developed economies enhance the appeal of the dollar, especially now that markets think the Federal Resreve may tighten its ultra-loose monetary policy by slowing asset purchases later this year.
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