RTTN:Euro Slides Against Most Majors; ECB Meeting In Focus
The euro declined against its most major counterparts in European morning deals on Monday, as investors await the European Central Bank policy meeting scheduled later this week.
In its meeting last month, majority of policymakers were open to cutting the benchmark rate, after the ECB's own forecasts suggested the euro zone economy will contract 0.3 percent this year. Meanwhile, economists expect the central bank to maintain current policy stance at 0.75%.
ECB President Mario Draghi is likely to pass the responsibility for solving debt crisis to Eurozone governments and shall reiterate willingness to undertake outright monetary transactions, or OMTs, which were introduced to keep Italian and Spanish borrowing costs down.
Eurozone investor sentiment improved sharply in January, beating forecasts, data released by the think-tank Sentix showed today.
The Sentix Index rose to -7 in January from -16.8 in December. Economists had forecast an improvement in the reading to -14.2. The index improved for a fifth consecutive month.
The euro fell to as low as 1.3018 against the greenback with 1.295 seen as the next support level. The pair finished Friday's deals at 1.3075.
Against the yen, the euro fell 1.22 percent to 114.14, reversing from early Asian session's multi-day high of 115.55. If the euro extends weakness, it may break 113.00 level.
The Japanese government is planning around JPY 12 trillion in stimulus spending for the economy in the fiscal year 2012, reports said Monday.
Out of the total planned spending, around JPY 2.6 trillion will be used to fund pension scheme, reports said. As much as JPY 4 trillion will be allocated for public work projects, Kyodo news agency said.
The euro slipped 0.26 percent to 0.8115 against the British unit, down from Friday's close of 0.8136. On the downside, the euro may breach 0.809 level.
U.K. house prices rose 1.3 percent in December from a month ago, a survey by Lloyds Banking Group's Halifax division showed today. House prices were forecast to remain flat after climbing 1.6 percent in November.
The euro hit near a 3-week low of 1.5629 against the kiwi with 1.555 likely seen as the next downside target level. The pair closed last week's trading at 1.5722.
The euro slipped to more than a 3-week low of 1.2445 against the aussie, compared to Friday's close of 1.2480. If the euro extends slide, it may break 1.24 level.
Against the loonie, the euro that ended Friday's trading at 1.2920 declined to 1.2860. The next support level for the euro-loonie pair is seen at 1.28.
Looking ahead, Eurozone producer prices for November are due shortly.
At 10:00 am ET, Canada Ivey PMI for December is due.
