Euro Drops Amid Risk Aversion
28 September 2015 - 06:39AM
RTTF2
The euro declined against the other major currencies in early
European deals on Monday, as European shares fell along with
commodities, and investors await U.S. employment numbers for
September on Friday for further clues regarding the Fed's course of
monetary policy.
Prospectus of a U.S. rate hike weighed, as the U.S. gross
domestic product was revised up to 3.9 percent on year in the
second quarter and the Fed chair Janet Yellen said the U.S. central
bank would begin to raise rates this year.
Commodities are weaker, with Brent crude down 1.2 percent at
$48.04 a barrel and gold down 0.1 percent at $1,145 an ounce.
Eurozone flash inflation for September is due on Wednesday, with
economists expecting a flat reading on year. A weak data could fuel
speculation of expansion of stimulus by the European Central Bank,
six months after its launch of QE programme.
In Spain, coalition of separatists has won the regional
parliamentary elections in Catalonia. The victory of Catalonia
separatists is a blow to Spanish Prime Minister Mariano Rajoy,
three months before a national election.
The euro has been trading in a negative territory in the Asian
session.
In European morning deals, the euro fell to 1.5870 against the
aussie and 1.4871 against the loonie, coming off from an early high
of 1.5987 and a 4-day high of 1.4951, respectively. The single
currency is likely to test support around 1.575 against the aussie
and 1.475 against the loonie.
Continuing early slide, the single currency dipped to near a
3-week low of 1.7454 against the kiwi, following a high of 1.7620
hit at 8:15 pm ET. The euro is seen finding support surrounding the
1.73 level.
The 19-nation currency pared gains to 1.0942 against the franc,
from its prior high of 1.0970. On the downside, the euro may
possibly find support around the 1.07 region.
The euro reached as low as 1.1165 against the greenback, 0.7346
against the pound and 134.20 against the yen, compared to Friday's
closing values of 1.1190, 0.7371 and 134.95, respectively. The next
possible support for the euro may be located around 1.10 against
the greenback, 0.72 against the pound and 132.00 against the
yen.
Looking ahead, U.S. personal income and spending data and U.S.
pending home sales data, all for August, are due to be released in
the New York session.
At 8:30 am ET, Federal Reserve Bank of New York President
William Dudley will discuss interest-rate increases and inflation
expectations in an interview conducted by WSJ's Jon Hilsenrath.
At 1:30 pm ET, Federal Reserve Bank of Chicago President Charles
Evans will deliver a speech titled "A Perspective on Monetary
Policy" at Marquette University's Business Leaders Forum, in
Milwaukee.
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