* German Ifo survey falls short of expectations
* Euro hits near three-week low versus dollar
* Dollar still hovering within sight of 100 yen mark
By Nia Williams
LONDON, April 24 The euro hit a near three-week
low against the dollar on Wednesday and looked vulnerable to
further losses after weak German data fanned speculation the
European Central Bank would cut interest rates.
A survey by Germany's Ifo think-tank showed business morale
dropped for a second month in April, fuelling concerns about the
health of the euro zone's largest economy.
The survey knocked the euro lower, with the single currency
already vulnerable after German PMI data on Tuesday showed a
sharp drop in business activity in April.
Investors focused on the possibility of a cut in the main
ECB refinancing rate, which stands at a record low 0.75 percent.
Recent comments by ECB policymakers have stressed falling
inflation and poor euro zone growth prospects, suggesting
policymakers are leaning towards a further cut at their next
meeting on May 2.
"Already the PMI yesterday had given an impulse to the
downside (to sell the euro) but some were waiting for the Ifo to
confirm the economy is not really recovering," said Carolin
Hecht, currency strategist at Commerzbank.
"Everyone is now really betting on the ECB to come to the
stage and cut the key rate."
The euro dropped as low as $1.2954, its lowest level
since April 5, before paring losses to last trade down 0.2
percent on the day at $1.2980.
Hecht said there would be support for the euro around
$1.2950 and the 200-day moving average at $1.2940, but it could
slide as low as $1.28 in the run-up to the ECB meeting.
However, Mitul Kotecha, Hong Kong-based head of global
foreign exchange strategy for Credit Agricole, said euro losses
may be limited as many traders had already priced in the
possibility of an ECB rate cut to some degree.
"Markets have moved around to the view that the ECB will cut
rates. We're looking for a cut in May. So to some extent the
euro is pricing that in," Kotecha said.
100 YEN IN SIGHT
The euro edged down 0.1 percent to 129.16 yen,
well off a more than three-year high of 131.10 yen hit earlier
The dollar was steady at 99.50 yen, having pulled
back from the day's high of 99.77 yen.
A trader for a Japanese bank in Bangkok said yen-buying by
options players, institutional investors and Japanese exporters
blocked the dollar's earlier rise.
Many traders are braced for a test of the 100 yen mark in
coming days, although offers were reported around 99.80-85 yen
that could limit the dollar's gains in the short-term.
The dollar hit a four-year high of 99.95 yen on April 11
after the Bank of Japan unveiled a sweeping monetary stimulus
The Australian dollar fell 0.15 percent to US$1.0275
, coming under pressure after weaker-than-expected
inflation data encouraged investors to bet on a further cut in
Australian interest rates.
The New Zealand dollar found support after the Reserve Bank
of New Zealand left interest rates at a record low 2.5 percent
and said they would stay there for the rest of the year.
The New Zealand dollar rose 0.8 percent on the day
to US$0.8462, pulling away from Tuesday's three-week low of