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Euro Falls to One-Month Low Against the Dollar

The euro fell to the lowest in a month against the dollar; as German factory orders declined

The euro fell to the lowest in a month against the dollar as German factory orders declined along with European retail sales, prompting speculation that the European Central Bank (ECB) will be slower to raise interest rates, as reported by Bloomberg.com.

The euro fell to $1.1977 in New York from $1.2024 on Feb. 3. The currency dropped as low as $1.1964, the weakest since Jan.3.

Signs of weaker growth my prompt traders to hedge bets that the ECB will raise rates at least twice this year. The 12-nation euro dropped 14% in 2005 as the Federal Reserve raised rates eight times, compared with only once by the ECB, widening the yield gap between euro- and dollar-dominated assets.

Manufacturing orders in Germany, Europe's biggest economy, dropped 1.6% in Dec., after a 1.3% gain in Nov. European retail sales fell in Jan. for the first time in four months. A seasonally adjusted index of sales in the 12 euro countries dropped to 49.7 from 52.2 in Dec., according to a survey for Bloomberg by NTC Research Ltd. A reading below 50 signals a decline.

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