Euro Slides Amid Risk Aversion On China's Trade Rhetoric
04:19, 17th May 2019
(RTTNews) - The euro drifted lower against its most major counterparts in the European session on Friday amid risk aversion, as China's state media reported that Beijing is willing to halt trade talks with the U.S., as President Donald Trump's recent approach showed "little sincerity" in holding meaningful talks.
The United States is not sincere about the resumption of trade talks with China, as it has been playing "little tricks" to disrupt the atmosphere, according to Xinhua News Agency.
"If there is no real concrete action by the United States, it will be meaningless for you to come and talk," Taoran Notes, a WeChat account run by the Economic Daily, said in a post late Thursday.
"It is better to suspend the consultation completely and return to the normal working track," it added.
Data from the Eurostat showed that Eurozone's core inflation, which excludes prices of energy, food, alcohol and tobacco, accelerated in April at a faster than estimated pace to its highest level in two years.
Core inflation climbed to 1.3 percent in April, which was higher than the initial estimate of 1.2 percent. In March, the figure was 0.8 percent.
Separate data showed that Eurozone construction output fell in March, after rising in the previous month, amid a decline in building activity and slower growth in civil engineering.
Construction output declined a calendar and seasonally adjusted 0.3 percent month-on-month in March, after a 3.0 percent rise in February. Output fell 1.0 percent in January.
The currency traded mixed against its major counterparts in the Asian session. While it rose against the pound and the yen, it held steady against the greenback. Against the franc, it dropped.
The euro declined to a 2-week low of 1.1158 against the greenback, from a high of 1.1184 hit at 3:00 am ET. The currency is poised to target support around the 1.10 mark.
After rising to a 2-day high of 122.97 against the yen at 9:00 pm ET, the euro reversed direction and slipped to a 2-day low of 122.31. The euro is likely to test support around the 120.00 region.
Bank of Japan Governor Haruhiko Kuroda said that Japan's extremely low interest rates are likely to remain at the current levels for an extended period given the uncertainties surrounding economic activity and prices.
Kuroda said the Bank would "maintain the current extremely low levels of short- and long-term interest rates for an extended period of time, at least through around spring 2020, taking into account uncertainties regarding economic activity and prices including developments in overseas economies and the effects of the scheduled consumption tax hike."
The single currency depreciated to a 2-day low of 1.1270 against the franc and held steady thereafter. The pair was valued at 1.1285 when it ended deals on Thursday.
On the flip side, the euro climbed to near a 3-month high of 0.8760 against the pound from yesterday's closing value of 0.8732. If the euro rises further, 0.89 is likely seen as its next resistance level.
The euro was trading higher at 1.7098 against the kiwi and 1.6232 against the aussie, up from its early lows of 1.7076 and 1.6207, respectively. The next possible resistance for the euro is seen around 1.72 against the kiwi and 1.64 against the aussie.
The common currency appreciated to a 2-day high of 1.5075 against the loonie, compared to 1.5041 hit late New York Thursday. On the upside, 1.52
is possibly seen as the next resistance level for the euro.
Looking ahead, U.S. leading indicators for April and University of Michigan's preliminary consumer sentiment index for May are scheduled for release in the New York session.
At 1:40 am ET, Federal Reserve Governor Richard Clarida will deliver a speech about the Federal Reserve's policy strategy, tools, and communication practices at an event hosted by Federal Reserve Bank of Philadelphia.
Copyright(c) 2019 RTTNews.com, Inc. All Rights Reserved