Euro Weakens Ahead Of ECB Minutes
Canbera-Australia (Nov 19) The euro traded in a negative territory in early European deals on Thursday, as investors await the minutes of the European Central Bank's October meeting, which spurred speculation about further easing measures at its December meeting.
The ECB releases the minutes of its October 21-22 meeting at 7:30 am ET . Investors await more details about the council members' support for an aggressive deposit rate cut and change in its asset purchase program, after the bank highlighted concerns over downside risks prevailing in the euro region.
The ECB President Mario Draghi has given strong hints for more easing at the October 22 meeting, which was backed again in his testimony to the European Parliament .
Eurozone bond yields also turned lower, as government bonds saw demand on hopes for more easing. German 10-year government bond yield fell 0.49%, while that of 10-year note slipped 1.17%. Yields move inversely to bond prices.
Data from the European Central Bank showed that the euro area current account surplus increased to an 8-month high in September.
The current account surplus rose to EUR 29.4 billion from EUR 18.7 billion in August. It was the highest since January, when the surplus totaled EUR 30.6 billion .
The euro was modestly higher in Asian deals, as risk-on mood prevailed after the Federal Reserve's October policy meeting suggested a likely interest rate increase in December.
The single currency eased to 131.43 against the yen and 1.0667 against the greenback, from its early 6-day high of 132.27 and 3-day high of 1.0718, respectively. The next possible support levels for the euro may be found around 130.00 against the yen and 1.05 against the greenback.
The euro slipped to a weekly low of 1.6347 against the kiwi, while touching 1.4879 against the aussie, its lowest since August 10 . If the euro weakens further, 1.62 and 1.47 are possibly seen as its next support levels against the kiwi and the aussie, respectively.
The 19-nation currency fell to 1.4143 against the loonie for the first time since July 22 . Continuation of the euro's downtrend may see it challenging support around the 1.40 zone.
On the flip side, the euro rebounded to 0.7016 against the pound, from its prior low of 0.6983, as the latter declined after UK retail sales. The pair finished yesterday's trading at 0.6996.
Data from the Office for National Statistics showed that UK retail sales declined more than expected in October.
Retail sales decreased 0.6% month-on-month in October, reversing a 1.7% rise in September. Economists had forecast a 0.5% fall.
The euro turned higher against the franc also, touching more than a 2-week high of 1.0889. This may be compared to a low of 1.0861 hit at 2:15 am ET . The euro is likely to locate resistance around the 1.095 zone.
Data from the Swiss Federal Customs Administration showed that Swiss trade surplus increased in October as exports grew faster than imports.
The trade surplus rose to CHF 4.2 billion in October from CHF 3.3 billion in the previous month.
Looking ahead, Canada wholesale sales for September, US weekly jobless claims for the week ended November 14 and leading indicators for October are slated for release in the New York session.
The Swiss National Bank's Governing Board Member Andrea Maechler speaks at the Money Market event in Geneva at 12:30 pm ET .
At the same time, the Federal Reserve Bank of Atlanta President Dennis Lockhart will speak about the US economy at the DeKalb Chamber of Commerce meeting in Atlanta .
At 4:45 pm ET , the Federal Reserve Governor Stanley Fischer gives a speech titled "Emerging Asia in Transition" at the Federal Reserve Bank of San Francisco .