Sept. 4 (Bloomberg) -- The euro headed for a second weekly loss against the dollar, its first back-to-back decline since July, on speculation European Central Bank President Jean-Claude Trichet will today reiterate the bank’s stance to refrain from raising interest rates. The euro was set for a fourth weekly decline versus the Swiss franc after Trichet said yesterday the region’s economic recovery will be “bumpy.” The dollar traded near a one-week low against the pound before a U.S. report estimated to show employers eliminated fewer jobs last month, sapping demand for the greenback as a refuge from the global recession. “The markets are looking for something like two rate hikes over the next 12 months, but it was definitely more before the meeting,” said Thomas Harr, a senior currency strategist at Standard Chartered Plc in Singapore, referring to yesterday’s ECB event. “The markets are taking this as slightly dovish. That’s the reason why the euro has weakened modestly.” The euro bought $1.4267 as of 7:40 a.m. in London from $1.4252 in New York yesterday and from $1.4303 on Aug. 28. It was at 132.15 yen from 132.03 yen. Europe’s currency fetched 87.34 British pence from 87.29 pence, and was at 1.5147 francs from 1.5144 francs. The dollar traded at $1.6332 per pound from $1.6319 in New York yesterday, when it fell to $1.6413, the lowest level since Aug. 25. The U.S. currency bought 92.63 yen from 92.64 yen, and was set for a fourth weekly loss, the longest run since December. ‘Rather Uneven’ Trichet and board members Lucas Papademos, Juergen Stark and Jose-Manuel Gonzalez Paramo will speak at the ECB and its Watchers conference in Frankfurt later today. The euro headed for its first weekly decline versus the pound since Aug. 7 after ECB’s Trichet warned yesterday of a “rather uneven” recovery even as the central bank raised its growth forecasts. The ECB kept its target lending rate at a record low of 1 percent. It increased its economic forecasts for the 16-nation euro region to predict growth of about 0.2 percent in 2010 instead of a 0.3 percent contraction. “The ECB cautiousness on the outlook could weigh on the euro,” Brian Kim, a currency strategist in Stamford, Connecticut, at UBS AG, wrote in a research note yesterday. “We maintain our one-month euro-dollar $1.4000 forecast.” Traders increased bets the ECB will raise its benchmark rate by the middle of next year. The implied yield on the three- month Euribor futures contract for June 2010 delivery fell to 1.305 percent today from 1.315 percent yesterday. The dollar was poised for its first weekly decline against the pound since July 31 before the payrolls report. U.S. employers cut 230,000 jobs in August, after a 247,000 reduction in July, according to a Bloomberg survey of economists. ‘Very Upbeat’ “We’re very upbeat on payrolls, as we’re way above the market at minus 150,000,” said Sean Callow, senior currency strategist at Westpac Banking Corp. in Sydney. “If we’re right on the upside surprise, the U.S. dollar might soften a bit.” The Labor Department may say today the U.S. unemployment rate rose to 9.5 percent last month, matching the highest level since 1983, according to the median estimate in a Bloomberg News survey of 77 economists. U.S. Treasury Secretary Timothy Geithner told reporters on Sept. 2 in Washington that it’s “too early” for the Group of 20 nations to scale down efforts to boost growth. A meeting of G-20 finance ministers and central bankers begins today in London. Losses in the dollar were tempered after Federal Reserve Bank of Dallas President Richard Fisher said the U.S. economy will probably undergo an extended period of slow growth while facing “financial headwinds” that will take years to wane. ‘Sluggish Economic Performance’ “We are likely to see a prolonged period of sluggish economic performance and uncomfortably high unemployment as businesses reallocate capital and labor,” Fisher said in remarks prepared for a speech yesterday at the University of California in Santa Barbara. The dollar benefits from its status as the world’s main reserve currency, while the yen tends to gain in times of financial turmoil as Japan’s trade surplus reduces reliance on foreign capital. The Dollar Index, which the ICE uses to track the dollar against the currencies of six major U.S. trading partners including the euro, was at 78.385 from 78.437 yesterday. Rupiah Weakens Indonesia’s rupiah fell, headed for a third weekly loss, as overseas investors pared holdings of the nation’s stocks on concern the global economic recovery will be slow to take hold. The rupiah is poised for its biggest weekly decline in more than two months even as the government yesterday raised its economic growth target for next year and the central bank halted interest-rate cuts for the first time in 10 months. The Jakarta Composite Index slumped 2.3 percent since the end of last week. “The rupiah has been slipping in the past few weeks as the sell-off in stocks and bonds led to some moderation of inflows,” said Peter Redward, head of Asian emerging-markets research at Barclays Plc in Singapore. “The equity market is still trying to adjust its pricing of growth expectations which I think is quite underestimated.” The rupiah dropped 0.3 percent to 10,135 per dollar, taking the loss this week to 0.8 percent, according to data compiled by Bloomberg. The rupiah may approach a range between 9,500 and 9,700 by year-end, according to Redward.

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