Euro Falls After Weak German ZEW Economic Sentiment Index
CANBERA (Alliance News) - The euro slipped against the other major currencies on Tuesday's European session, after data showed that German economic confidence weakened for the seventh consecutive month in July, signaling concerns over economic growth of Europe's largest economy.
The survey results from the Mannheim-based Centre for European Economic Research/ZEW showed that Germany's economic sentiment index fell 2.7 points to 27.1 in July. The score was expected to fall to 28.2.
The survey showed that assessment of current economic situation declined by 5.9 points to 61.8 in July.
Meanwhile, economic sentiment in euro area decreased 10.3 to 48.1 in July. Likewise, current conditions fell by 3.8 points to -31.5.
The Fed Chair Janet Yellen will testify before Senate Banking Committee today and the House Financial Services Committee on Wednesday. Her comments are closely watched for clues about the state of the economy and on timings of interest rate hikes.
Speaking to the Committee on Economic and Monetary Affairs at the European Parliament in Strasbourg on Monday, the European Central President Mario Draghi said that the bank would maintain its accommodative policy stance for an extended period of time.
'The ECB continues to stand ready to take action, if necessary, to further address risks of too prolonged a period of low inflation. This could also include the use of other unconventional instruments in line with our price stability mandate,' Draghi added.
The euro declined to 1.3586 against the greenback, which is its weakest since July 7, and was 0.3% lower from an early high of 1.3627. On the downside, 1.35 is seen as next possible support level for the euro. At Monday's close, the pair was worth 1.3618.
The euro retreated to 137.97 against the yen, after having advanced to 138.42 at 8:45 pm ET. The next possible downside target for the euro is seen around the 137.5 zone. The euro-yen pair was worth 138.24 at Monday's close.
The Bank of Japan maintained its monetary stimulus unchanged as widely expected and reaffirmed its aim to achieve the 2% inflation in a stable manner. But the growth outlook for the current fiscal year was downgraded as exports and household spending remain weak.
At the Monetary Policy Meeting, members unanimously decided to continue to increase the monetary base at an annual pace of about JPY 60-JPY 70 trillion.
After rising to 0.7979 against the pound in prior deals, the euro fell to a weekly low of 0.7926 after the data. If the euro-pound pair continues its slide, it is likely to find support at the 0.78 region. The pair finished Monday's trading at 0.7968.
UK inflation accelerated more than expected in June on higher clothing and footwear prices, data from the Office for National Statistics showed. Consumer prices rose 1.9% in June from last year, it said.
The euro eased a bit against the franc, after advancing to a 5-day high of 1.2148 at 12:30 am ET. The euro-franc pair was valued at 1.2145 when it closed deals yesterday.
The euro pared gains to 1.4591 against the loonie, 1.4502 against the aussie and 1.5450 against the kiwi, from its prior high of 1.4622, multi-day highs of 1.4545 and 1.5497,respectively. The euro is likely to find support around 1.45 against the loonie, 1.44 against the aussie and 1.53 against the kiwi.
Looking ahead, New York Fed's empire manufacturing survey for July, US import price index and retail sales for June, along with Canada existing home sales for June are set for release in the New York session.
Copyright RTT News/dpa-AFX
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