By James Amott
London, Nov. 8 (Bloomberg) -- The euro was little changed against the dollar for a third day before a decision by the European Central Bank on whether to lower its benchmark interest rate to foster growth in the 12 economies using the currency.
All but one of 24 economists surveyed by Bloomberg News predicted the ECB will pare its benchmark rate by at least a quarter point from 3.75 percent. Traders have been rewarding central banks that take steps to encourage economic growth in recent months. The decision is due at 12:45 p.m. London time.
``We're going for a 50 basis-point cut, which would move it to 90.50'' U.S. cents, said Folker Hellmeyer, chief currency analyst at Landesbank Hessen-Thueringen in Frankfurt. A quarter- point reduction would be unlikely to move the euro, although it ``might spark disappointment,'' while failure to cut would ``send negative signals for the euro and stocks,'' he said.
Europe's common currency bought 89.78 U.S. cents, compared with 89.63 late yesterday. It was at 108.49 yen, from 108.58. The euro has fallen 4.8 percent against the dollar and risen 0.6 percent against the yen this year. The dollar was little changed at 120.85 yen, compared with 121.06.
Speculation among analysts and investors that the ECB will cut 50 basis points increased after a report yesterday showed manufacturing orders in the region's largest economy had their biggest fall in six years in September.
Resort to Larger Cut?
``Signs of a slowdown in Germany may persuade the ECB to resort to a 50 basis-point cut,'' said Kenji Takei, a currency sales vice president at the Tokyo branch of Societe Generale SA. ``That's good for the euro, on the perception that appropriate monetary measures will benefit the region's economy.''
Slowing inflation may hand another reason to cut to the ECB, whose mandate is to combat it. Policy makers have set an annual ceiling of 2 percent for the region.
A final report today showed German inflation, which accounts for a third of the consumer-price index for the region, slowed in October to the lowest level in more than a year. The annual rate fell to 2 percent from 2.1 percent in September.
A first estimate by the European Union on Monday said the region's inflation rate dropped to 2.4 percent in last month, from 2.5 percent in September.
The European currency weakened after the ECB left rates unchanged at its last three meetings amid signs the region's economy was slowing.
Few in Comparison
A reduction today would be the fourth this year, compared with the Federal Reserve's 10 rate cuts, which have taken the key U.S. rate to 2 percent. Further U.S. rate cuts are likely, analysts said.
The U.S. economy, destination for 14 percent of Europe's exports, shrank at a 0.4 percent annual rate in the third quarter and is expected to contract in the fourth. The euro region's economy grew 0.5 percent in the second quarter. The European Union's statistics office will publish a third estimate of euro- zone second-quarter GDP at 11 a.m. London time.
The Bank of England is also due to make an interest-rate decision at noon London time. The U.K. central bank will probably pare its rate by a quarter point from 4.5 percent, economists said. The euro was little changed at 61.27 pence, from 61.30.