The euro declined against its major counterparts in the European session on Friday, with investors turning skeptical ahead of a crucial constitutional referendum this weekend in Italy that would determine the political future of Prime Minister Matteo Renzi.

Since Renzi has pledged to resign in the event of a "no vote", markets participants are worried over the government's recapitalization process of Italian banks.

As latest opinion polls show a notable lead to 'no' vote, investors fear that such an outcome would lead to a period of political uncertainty and might derail sluggish economic growth.

With the OPEC-led market surge appearing to fizzle out, investors are now waiting for cues from the U.S. jobs report due tonight and a presidential election in Austria due this weekend.

Figures from Eurostat showed that Eurozone producer prices rose for the second straight month in October, and at a faster-than-expected pace.

Industrial producer prices climbed 0.8 percent month-over-month in October, exceeding economists' expectations for an increase of 0.4 percent. That was also faster than the 0.1 percent slight rise in September.

The euro was trading in a positive territory in the previous session.

The euro declined to 0.8425 against the pound, following a high of 0.8483 hit at 7:45 pm ET. Continuation of the euro's downtrend may lead it to a support around the 0.82 zone.

Survey data from IHS Markit showed that U.K. construction sector expanded at a faster pace in November on robust activity and new orders.

The Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index rose unexpectedly to 52.8 in November from 52.6 in October.

Pulling away from an early more than 2-week high of 1.0690 against the greenback, the euro eased to 1.0636. Further downtrend may take the euro to a support near the 1.05 level.

The single currency reversed from an early 2-day high of 1.0790 against the Swiss franc, with the pair trading lower at 1.0765. If the euro-franc pair extends decline, 1.04 is possibly seen as its next support level.

Data from the State Secretariat for Economic Affairs showed that Switzerland's economic growth remained flat in the third quarter as increase in investment was offset by net trade.

Gross domestic product registered nil growth in third quarter after expanding 0.6 percent a quarter ago. The economy was forecast to grow 0.3 percent.

The single currency, having advanced to a 4-1/2-month high of 121.89 against the yen, reversed direction and declined to 120.99. On the downside, the euro may target support around the 119.00 area.

Data from the Bank of Japan showed that Japan's monetary base advanced 21.5 percent on year in November, coming in at 417.657 trillion yen.

That follows the 22.1 percent spike in October.

The common currency eased to 1.4153 against the loonie, 1.4999 against the kiwi and 1.4331 against the aussie, from its early high of 1.4231, session's high of 1.5068 and an 11-day high of 1.4437, respectively. The euro is likely to target support around 1.39 against the loonie, 1.47 against the kiwi and 1.40 against the aussie.

Looking ahead, U.S. and Canadian jobs data for November are due in the New York session.

At 8:45 am ET, the Federal Reserve Governor Lael Brainard delivers opening remarks in Washington DC.

The Federal Reserve Governor Daniel Tarullo delivers a speech titled "Financial Regulation Since the Crisis" at the Financial Stability Conference in Washington DC at 1:00 pm ET.

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