News Column

Euro Falls On Risk Aversion

May 16, 2014

CANBERA (Alliance News) - The euro declined against the other major currencies in European deals on Friday as European stocks fell amid tensions in Ukraine, as well as on concerns over global economic recovery.

The US warned Russia of new sanctions if they undermine Ukraine's Presidential election due on May 25. The US and European nations would respond with sectorial sanctions "if Russia or its proxies disrupt the elections", the US Secretary of State John Kerry said at a meeting with European counterparts in London.

Euro area foreign trade surplus rose more-than-expected in March from the previous month, figures from Eurostat showed today.

The trade surplus came in at a non-seasonally adjusted EUR 17.1 billion, which exceeded economists' expectations for EUR 16 billion. A year ago, the trade surplus was EUR 21.9 billion.

The euro fell sharply yesterday as weak Eurozone GDP data stocked speculation that European Central Bank would provide stimulus measures in its next meeting to support recovery.

The euro reached as low as 0.8155 against the pound, compared to yesterday's closing quote of 0.8166. The next possible downside target for the euro is seen around the 0.81 zone.

The euro that consolidated against the franc in early deals ticked down to 1.2208. Further weakness may lead the euro to a support around the 1.215 level. The pair ended yesterday's trading at 1.2214.

The 18-nation currency declined to 1.3693 against the US dollar, from an early high of 1.3727. The euro is likely to challenge support at the 1.36 mark. The pair was valued at 1.3710 at yesterday's close.

Having advanced to 139.44 against the yen in early deals, the euro slipped to near 3-month low of 138.94. At Thursday's close, the pair was worth 139.27. The euro is likely to find support around the 138.00 zone.

Pulling away from an early 3-day high of 1.4702 against the aussie, the euro slipped to 1.4631. The next possible downside target for the euro lies around the 1.457 mark.

The euro retreated to 1.4891 against the loonie and 1.5862 against the kiwi, off early high of 1.4942 and a 2-day high of 1.5911, respectively. The euro is poised to challenge support around 1.48 against the loonie and 1.58 against the kiwi.

Looking ahead, US housing starts and building permits for April and Reuters/University of Michigan's consumer confidence index for May are set for release in the New York session.

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Source: Alliance News

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