Euro Declines On Greek Bailout Uncertainty, U.S. Fiscal Cliff

07:27, 9th November 2012

(RTTNews) - The euro fell against other major currencies in the European session on Friday as uncertainty surrounding Greek bailout and U.S. fiscal woes dampened investor sentiment.

German finance minister Wolfgang Schaeuble was quoted as saying yesterday that Greece has not reached accord with international lenders so as to get bailout money quickly. His comments came few days after Greek Parliament nodded approval for austerity measures.

Euro-zone finance ministers meeting to be held next week is unlikely to grant approval for further tranche of international aid to Greece, reports said.

U.S. fiscal worries also dampened mood as the country need to avoid the 'fiscal cliff' that refers to various tax hikes and budget cuts set to take into effect at the beginning of January, if lawmakers and the White House fail to act once again.

Germany's harmonized inflation came in at 2.1 percent in October, in line with flash estimate, final data from the Federal Statistical Office showed today. The annual rate also remained unchanged from September.

At the same time, consumer prices climbed 2 percent year-on-year in October, similar to the increase logged in September and matched preliminary estimate

The euro dipped to a fresh 2-month low of 1.2708 against the greenback, reversing from an early 2-day high of 1.2791. On the downside, the euro may break 1.265 level. At Thursday's close, the pair was worth 1.2748.

The euro declined to 0.7969 against the U.K. currency from an early high of 0.7989. The next support level for the euro-pound pair is seen at 0.79. The pair closed trading at 0.7978 yesterday.

The U.K. trade in goods resulted in a deficit of GBP 8.4 billion in September compared to a GBP 10 billion shortfall in August, the Office for National Statistics said today. It fell below a GBP 8.9 billion deficit forecast by economists.

Paring early gains, the euro slipped against the franc and held steady. The euro is now trading at 1.2060 against the franc with 1.20 seen as the next downside target level.

Against the yen, the euro dipped to 100.66, its lowest level since October 11. If the euro declines further, it may seek 100.00 level. The pair closed Thursday's American session at 101.32.

Japanese consumer confidence deteriorated for the second consecutive month in October, survey results from the Cabinet Office showed today.

The seasonally adjusted consumer sentiment index came in at 39.7, down from 40.1 in September. However, the reading was above the consensus forecast of 39.5

The euro eased from its Asian session's high against the Australian dollar and fell to as low as 1.2229. The euro-aussie pair traded 1.2255 at yesterday's close. The euro may break 1.215 level, if it slides further.

The Reserve Bank of Australia revised down its forecast for economic growth next year, largely reflecting reduced mining investment.

The central bank cut its forecast for gross domestic product growth in 2013 to 2.25-3.25 percent from August's prediction of 2.75-3.25 percent.

The euro dropped to 1.2717 against the Canadian dollar after hitting a 4-day high of 1.2778 earlier. On Thursday, the pair closed deals at 1.2755.

From the U.S., import price index for October, wholesale inventories for September and Reuters/University of Michigan's consumer sentiment index for November are due in the American morning session.