RTTN:Euro Pares Gain As Eurozone Retail Sales Fall Unexpectedly
In the early European session on Wednesday, the euro pulled back from its early highs against most major currencies after the release of Eurozone retail sales data, which declined more than economists forecast.
Data from Eurostat said that Eurozone retail sales decreased for the third consecutive month in October.
Retail sales were down 1.2 percent in October from a month ago, when it dropped 0.6 percent. Sales were forecast to fall just 0.2 percent.
The volume of retail sales on a yearly basis declined 3.6 percent, following a 1.6 percent drop in September. Economists had expected a 0.8 percent fall for October.
A survey released by Markit Economics revealed that the euro area private sector contracted less than estimated in November.
The composite output index, which measures the combined output of the manufacturing and service sectors, rose to 46.5 in November from 45.7 in October, final data showed. The flash reading was 45.8.
After hitting a 7-week high of 1.3127 against the U.S. dollar, the euro fell to as low as 1.3087. The euro is likely to seek next support level at 1.30. At Tuesday's close, the pair was quoted at 1.3096.
The euro is now trading near yesterday's close of 0.8134 against the pound, reversing from an early 6-week high of 0.8149.
U.K. Chancellor of the Exchequer George Osborne is set to reaffirm his commitment to bring the country's budget deficit down over the coming year, while delaying his targeted time to stop government debt from rising.
The slower economic growth is likely to limit the ability of the nation to put a lid on the increasing government debt. Earlier, the government had pledged to start cutting the public sector debt by 2015-16.
Against the yen, the euro is worth 107.58, off its early 7-1/2-month high of 107.98. The euro-yen pair closed Tuesday's trading at 107.26.
Bank of Japan Deputy Governor Kiyohiko Nishimura said today that the central bank is ready to take decisive action if the economy deviates from the baseline scenario of the latest forecasts.
"The Bank has been and will always be ready to take appropriate and decisive action when the economy strays too far from the baseline scenario of the outlook for economic activity and prices or when risks to that scenario materialize," he said while addressing business leaders in Niigata.
The euro declined 0.2 percent to 1.2991 against the loonie from an early Asian session's high of 1.3022. The next support level for the euro-loonie pair is seen at 1.29. The pair finished yesterday's deals at 1.3005.
From the U.S., ADP employment data for November, factory orders for October and ISM non-manufacturing composite index for November are expected in the North American session.
