FOREX-Euro falls amid worries about ECB bond-buying

* Japanese yen rises to 7-week high vs US dollar
* Scandi currencies take back some strength as euro falls
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
LONDON, May 6 (Reuters) - The euro resumed its fall on
Wednesday and the Japanese yen reached a seven-week high against
the U.S. dollar after a court decision challenging German
participation in the euro zone's stimulus programme.
Germany's highest court on Tuesday gave the European Central
Bank three months to justify purchases under its bond-buying
programme, or lose the Bundesbank's participation in one of its
main stimulus schemes.
The euro fell to a six-day low of $1.0816 on Wednesday
EUR=EBS . The common currency was last down 0.1% at $1.0825.
The ECB is expected to be able to justify its bond
purchases, so the German court decision is unlikely to derail
the euro zone's stimulus programme. But the uncertainty is only
the latest strain on Europe's teetering coronavirus response and
undermines the euro zone project and the euro.
Athanasios Vamvakidis, head of G10 currency strategy at Bank
of America Merrill Lynch, said he expected the euro to weaken
further amid a weaker global outlook, a more severe euro zone
recession than others expect, a weaker euro zone macro policy
response and low oil prices. The fact that speculators are now
long the euro also undermines its current levels, he said.
"We expect euro/dollar to weaken in the months ahead,"
Vamvakidis said, adding that the saw the euro falling to as low
as between $1.02 and $1.05 "with risks to the downside."
A declining euro helped Scandinavian currencies regain some
strength. The Swedish crown rose to a two-month high versus the
euro EURSEK=D3 and the Norwegian crown reached a one-month
high against the euro EURNOK=D3 .
The yen rose 0.2% to 106.35, having earlier reached 106.20,
its strongest since March 17 JPY=EBS .
Elsewhere, U.S. President Donald Trump again pressed China
about the origins of the coronavirus outbreak that began in the
Chinese city of Wuhan late last year.
Traders will be watching the IHS Markit's final euro zone
composite Purchasing Managers' Index (PMI) for April at 0800
GMT, which is expected by Reuters economists to be confirmed at
13.50.