Euro Falls as Reports Expected to Show Weak German Economy

The euro fell against the dollar on speculation reports this week will signal a second quarter of economic contraction in Germany, the largest economy in the 12-nation currency region. The number of unemployed Germans rose last month and industrial production declined in November, the government is expected to say. The statistics contrast with U.S. employment figures and a report on the service sector last week that signaled the world's largest economy is rebounding. Europe's common currency dropped to 89.32 U.S. cents, from 89.50 late Friday in New York. It earlier fell to 88.86 cents. Against Japan's currency, it traded at 117.14 yen compared with 117.12. The yen traded at 131.05 per dollar, compared with 131.03 Friday. Europe's common currency slid 2.4 percent in the last three months of 2001 after Germany's economy contracted for the first time in more than two years during the third quarter. Economists say it probably shrank further in the fourth quarter. The December unemployment rate rose to 9.6 percent, according to a poll of economists by Bloomberg News. That would be its highest since May 2000. Separately, indexes of confidence in the euro nations' economies are expected to show declines for December when they are released tomorrow.