The euro leveled off Thursday in New York after experiencing sharp weakness against the dollar and yen earlier in the week as traders moved to lower-yielding currencies amid the financial crisis. The European currency continued to edge higher against the struggling pound.
The euro moved slightly higher to 1.2868 against the U.S. dollar. The European currency hit a 23-month low of 1.2727 on Wednesday evening as traders moved toward lower-yielding currencies amid growing concern of global recession.
Against the yen, the euro was range-bound near a multi-year low. The pair exchanged at 125.60 in the late morning. The euro fell to 123.39 against the yen on Wednesday, its lowest mark since 2002.
The European currency added to an 11-day high against the British pound on Thursday. The pound saw sharp weakness on Wednesday as Bank of England Governor Mervyn King said it now seems likely that the UK economy is entering a recession. Thursday, Monetary Policy Committee member Kate Barker said she expects inflation to slow in 2009.
European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said a rate cut wouldn't add to inflation pressures on Thursday. In an interview with an Irish newspaper, he said the ECB is free to determine the direction of its monetary policy.
President Nicolas Sarkozy announced the creation of a sovereign wealth fund to protect French companies against foreign investors amid the global credit crisis. He also said on France will suspend corporate tax on all new investments by companies until January 2010 in an effort to stimulate the beleaguered economy.
On the economic front, Eurozone industrial new orders fell by a sharp 6.6% year-on-year in August, reversing a revised 2.9% increase in July, the Eurostat said. The decrease was significantly quicker than the expected fall of 0.1%.
Meanwhile, the Eurozone's working day and seasonally adjusted current account deficit widened to EUR8.4 billion in August from a revised deficit of EUR1.8 billion in July, the European Central Bank said.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.