The euro dropped from a one-week high against the dollar as the euro area’s jobless rate rose to a record in March and inflation slowed, adding to signs the region is struggling to emerge from recession.
Treasuries rallied and the euro weakened to a four-month low against the dollar, while Italian and Spanish bonds slumped, as concern about Europe’s debt crisis deepened. Most U.S. stocks fell, even as the Standard & Poor’s 500 Index pared a drop of as much as 0.8 percent.
Canada’s dollar fell from the strongest in two weeks against its U.S. counterpart as investor risk appetite shrank after the European Central Bank signaled concern the euro’s strength may hurt its 17-nation region.
The Canadian dollar traded at almost a five-week high against its U.S. counterpart as futures traders decreased bets on the currency’s decline before data forecast to show a second consecutive month of job gains.
Emerging markets may have further reason to complain about perceived currency wars next year as central banks in rich nations become more aggressive in chasing the economic boost of weaker exchange rates.