Euro falls to two-week low vs dollar on ECB rate cut view
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The euro dropped to a two-week low against the dollar on Tuesday after weak German data raised concerns about the health of the euro zone economy, reviving speculation that the European Central Bank could cut interest rates.
A survey showed Germany's private sector shrank for the first time in five months in April, overshadowing improvements in French data. The U.S. manufacturing sector was also far from upbeat and along with soft Chinese factory growth numbers in April, the reports overall fueled concerns about a global slowdown.
The data also boosted the yen and drove the commodity-linkedAustralian dollar to a six-week low against the U.S. dollar.
"Given the deteriorating fundamentals in the euro zone, the prospect of (an ECB rate cut) has certainly increased," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York. "A rate cut would be the quickest and least expensive policy course."
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