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Euro slips as German consumer confidence drops

Euro slips as German consumer confidence drops

The euro was lower against the U.S. dollar Wednesday after a report showed German consumer confidence slipping for the first time in six months amid recent market turbulence.
The 13-nation euro bought US$1.3596 in morning European trading, down from US$1.3634 in New York late Tuesday. The British pound dropped to US$2.0050 from US$2.0072.
The euro slipped after Germany's GfK research group said its forward-looking consumer climate indicator for September stood at 7.6 points _ down from a revised 8.5 in August, below analysts' expectations and the first drop since March.
GfK said August's market turmoil, a result of the subprime credit crisis in the U.S., helped put "a damper on the euphoria of previous months."
A key U.S. consumer confidence index also showed a decline Tuesday.
The dollar remains sensitive to mixed predictions as to whether the U.S. Federal Reserve will cut its main interest rate from 5.25 percent next month.
Analysts also have raised doubts about prospects of the European Central Bank raising its key refinancing rate to 4.25 percent next month, following mounting problems with credit availability.
Higher interest rates, used to combat inflation, can strengthen a currency by giving investors higher returns on investments denominated in it.
The dollar drifted lower against the Japanese currency, sliding to 114.41 yen from 114.56.


Updated : 2021-05-17 00:30 GMT+08:00