RTTN:Euro Declines On Lingering Eurozone Debt Woes
(RTTNews) - In early European deals on Thursday, the euro slipped against other major currencies as concerns persist over Europe's debt crisis.
Italian government bond yields rose Wednesday, British unemployment neared a 17-year high and Fitch Ratings downgraded its investment-grade ratings on five major European commercial banks, sparking fears that Europe's sovereign-debt crisis is worsening.
Investors were also disappointed after economic data from China to Japan and South Korea pointed to slowing global economic growth.
Meanwhile, the European Central Bank said in its monthly bulletin today that the economic outlook for Eurozone continues to be subject to particularly high uncertainty and intensified downside risks. Downside risks relate to intensified tensions in the financial markets.
The Governing Council assessed that the downside risks to the economic outlook for the euro area are confirmed.
Adding to euro's slide, flash survey results from Markit Economics showed that the Eurozone private sector activity contracted for a fourth month in succession in December. However, the pace of decline moderated compared to November.
The composite output index, that measures activity in both manufacturing and services, rose to 47.9 in December from 47 in November compared to economists forecast of 46.5.
After hitting a high of 101.63 against the yen at 3:30 am ET, the euro edged down. The euro-yen pair is now trading at a fresh 2- 1/2 -month low of 101.08 with 100.8 seen as the next downside target level. At yesterday's close, the pair was quoted at 101.38.
Business sentiment among large Japanese manufacturers worsened more than expected in the three months to December, the BOJ's closely watched tankan survey showed earlier in day, as the yen's strength, the deepening euro-zone debt crisis and flooding in Thailand darkened the economic outlook.
The quarterly tankan's index of sentiment among large manufacturers deteriorated to minus 4 for the three months to December, from plus 2 in the September survey and worse than an economists' forecast for minus 2.
The euro is currently worth 1.2960 against the dollar and 0.8380 against the pound, compared to highs of 1.3039 and 0.8427, hit respectively at 3:30 am ET. If the euro slides further, it may likely target 0.835 against the pound and 1.287 against the dollar. The euro closed yesterday's trading at 0.8397 against the pound and 1.2987 against the dollar.
U.K. retail sales declined more than expected in November, data from the Office for National Statistics showed today.
(RTTNews) - Retail sales volume including auto fuel declined 0.4 percent in November from a month ago. Economists were expecting a 0.3 percent fall after rising 1 percent in October. On a yearly basis, sales advanced 0.7 percent compared to a 0.4 percent rise forecast by economists.
The euro that rose to a 1-week high of 1.2399 against the Swiss franc in Asian deals fell to a 2-week low of 1.2255 in the early European session. The next downside target level for the euro-franc pair is seen at 1.223. The pair was quoted at 1.2379 at yesterday's close.
The franc rose in response to the Swiss National Bank's decision to maintain its three-month Libor rate close to zero as expected by economists. The central bank will also continue to enforce the minimum exchange rate of CHF 1.20 per euro.
The bank said it is prepared to buy foreign currency in unlimited quantities. The SNB reiterated that it is ready to take further measures at any time if the economic outlook and the risk of deflation so require.
Investors now turn toward the New York session, in which the U.S. PPI, industrial production and capacity utilization - all for November, current account balance for the third quarter and the weekly jobless claims for the week ended December 10 are scheduled for release.
