Euro Slides On Rising Risk Aversion, Slowing German GDP Growth
August 24 2016 - 12:29AM
RTTF2
The euro declined against its major counterparts in European
morning trading on Wednesday, after data showed that German economy
grew at a slower pace in the second quarter, and on rising risk
aversion on the back of falling oil prices.
Data from statistics office Destatis confirmed that German
economic growth slowed in the second quarter, as initially
estimated.
Gross domestic product climbed 0.4 percent quarter-on-quarter,
in line with preliminary estimate, and slower than the 0.7 percent
expansion seen in the March quarter.
On a yearly basis, GDP advanced 1.8 percent, slightly slower
than the first quarter's 1.9 percent increase.
Oil prices continued decline as API data showed an unexpected
build in U.S. crude stocks and concerns that Chinese demand could
falter overshadowed reports that Iran may work with other major
crude producers to prop up the market.
Investors remained cautious ahead of Federal Reserve Chair Janet
Yellen's speech later this week.
Yellen's speech at the Kansas City Fed's monetary policy
symposium in Jackson Hole, Wyoming, could offer clues about the
outlook for U.S. interest rates.
The euro showed mixed trading against its major rivals in Asian
deals. While the euro held steady against the pound and the franc,
it fell against the greenback. Against the yen, it rose.
Reversing from an early high of 113.58 against the Japanese yen,
the euro dropped to a 6-day low of 113.18. The euro is seen finding
support around the 112.00 zone.
Figures from the Cabinet Office showed that Japan's leading
index, which measures the future economic activity, increased in
June instead of a stable reading reported initially.
The leading index rose to 99.2 in June from 98.4 in the previous
month. The June figure was revised up from 98.4.
The 19-nation currency weakened to a 2-day low of 1.1287 against
the greenback, compared to 1.1304 hit late New York Tuesday. If the
euro-greenback pair extends decline, it may locate support around
the 1.11 mark.
The euro dropped to 0.8550 against the pound, its lowest since
August 10. On the downside, the euro may locate support around the
0.84 region.
Although the euro edged down to 1.0879 against the Swiss franc,
it reversed its losses in short while. The pair was trading at
1.0892, compared to Tuesday's closing value of 1.0886.
Looking ahead, U.K. BBA mortgage approvals for July is slated
for release at 4:30 am ET.
In the New York session, U.S. FHFA house price index for June,
U.S. existing home sales data for July and crude oil inventories
data are set to be published.
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