May 10, 2011
The euro fell against half its major counterparts after Standard & Poor’s cut Greece’s credit rating, renewing concern the region’s debt crisis is worsening.
Norway’s krone rallied against all of its most-traded counterparts as commodities rebounded from the worst week since 2008, with crude oil gaining. The 17-nation currency erased losses against the dollar after touching a two-week low before a report this week forecast to show the region’s economy grew in the first quarter at a faster pace, supporting the case for higher interest rates. The Australian dollar gained before a Chinese report expected to indicate imports increased.
“The focus has been all about the euro today because the move has been quite significant,” said Mary Nicola, a currency strategist at BNP Paribas SA in New York. “Euro-zone gross domestic product will be important to see if it reaffirms the strength of the euro-zone economy and adds to the argument of why the European Central Bank should go ahead with rate hikes.”
The euro was little changed at 115.19 yen at 5 p.m. in New York, from 115.44 on May 6, after falling 0.4 percent to 114.99. The euro rose 0.3 percent to $1.4362, from $1.4316, after touching $1.4255, the lowest level since April 19. The dollar dropped 0.3 percent to 80.36 yen, from 80.63.
Implied volatility on one-month options for the euro against the dollar, a gauge of traders’ expectations for future currency swings, rose to 12.75 percent, the highest level since Jan. 10. It fell to 9.10 percent on April 5.
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