BRUSSELS (Alliance News) - The euro drifted lower against its major rivals, barring the US dollar, in early deals on Tuesday as lingering concern about the US stimulus withdrawal and weak producer price figures prompted traders to stay on the sidelines ahead of Thursday's ECB rate decision and Friday's US nonfarm payrolls data. The industrial producer prices in the euro area decreased for the third consecutive month in October to 1.4 percent year-on-year following declines of 0.9 percent each in August and September. Economists had expected prices to fall 1 percent in October. The headline producer price index in a month-over-month basis decreased a seasonally adjusted 0.5 percent compared to September, when they recorded a 0.2 percent increase, which was revised up from 0.1 percent. Expectations were for a 0.2 percent fall in October. The European bourses are trading red today as fresh signs of strength in the world's largest economy rekindled fears of Fed tapering, with the better-than-expected US manufacturing data boosting speculation that the Federal Reserve would soon tighten its monetary policy. With debate heating up on the likelihood of tapering next month, investors look ahead to reports on US third-quarter GDP and jobless claims due on Thursday and non-farm payrolls data for November due Friday for further clues regarding the Fed's future course of monetary policy. Caution ahead of Thursday's central bank interest rate decisions from the European Central Bank and the Bank of England also refrained traders from taking positions in risky bets. Elsewhere, the survey results compiled by Markit Economics/the Chartered Institute of Purchasing and Supply (CIPS) showed that the headline purchasing managers' index grew at the sharpest pace in more than six years. According to the survey results compiled by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS), the headline purchasing managers' index rose to 62.6 in November from 59.4 in October, signaling another strong upturn in the construction sector. At the same time, retail sales in the UK increased 2.3 percent in November following the 2.6 percent gain in the previous month, according to data released by the British Retail Consortium. Same-store sales rose 0.6 percent in the month, a slight decrease from the 0.8 percent gain in October. The euro eased to 139.24 against the yen, pulling away from Asian session's solid ride above 1.40, a level last seen in October 2008. The common currency reached below the 1.23 level against the Swiss franc, falling to an 8-day low of 1.2290, although the pair remained at its recent familiar ranges. The single currency slipped to 0.8261 against the pound, with the pair hovering near yesterday's fresh 10-month low of 0.8252. On the downside, the European shared currency may find target levels around 0.82 against the British sterling, 1.2280 against the Swiss franc and 139.0 against the yen. On the contrary, the euro bounced back to 1.3575 against the US dollar around 4:00 am ET from Asian session's weekly low of 1.3524. On the upside, the euro-greenback pair may challenge resistance around the 1.3620/25 area, its Friday's peak.

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