Euro Slides Against Majors

Euro Slides Against Majors

The euro drifted lower against its major counterparts in the European session on Tuesday, as Italian bond yields spiked higher despite reassuring comments from Economy Minister Giovanni Tria over the government's budget plans.

In his Parliamentary address, Tria said he would have a «constructive dialogue» with the EU over the 2019 budget.

He also added that the new budget deficit targets were prudent.

«(We will) significantly reduce, within the first two years of this legislature, the growth gap with the eurozone and bring about the first significant decrease in the debt ratio over the next three years,» Tria said.

Preliminary data from the statistical office Destatis showed that German exports declined for a second straight month in August, defying expectations for an increase.

Merchandise exports fell a calendar and seasonally-adjusted 0.1 percent from July, when they decreased 0.8 percent. Economists had expected a 0.4 percent increase.

The euro held steady against its major counterparts in the Asian session, with the exception of the yen.

The euro declined to 1.1432 against the greenback, its lowest since August 20. On the downside, 1.12 is possibly seen as the next support level for the euro.

After rising to 0.8791 against the pound at 5:30 am ET, the euro reversed direction and dropped to a 3-1/2-month low of 0.8761. The euro is likely test support around the 0.86 area.

The euro, having advanced to 130.23 against the yen at 3:00 am ET, changed course and fell to near a 4-week low of 129.34. The next possible support for the euro is seen around the 128.00 level.

Pulling away from an early high of 1.1416 against the franc, the euro dropped to a 5-day low of 1.1369. If the euro falls further, it may find support around the 1.12 level.

The euro depreciated to a 4-day low of 1.4857 against the loonie and a 5-day low of 1.6195 against the aussie, reversing from its early highs of 1.4900 and 1.6263, respectively. The euro is seen finding support around 1.47 against the loonie and 1.60 against the aussie.

The single currency eased back to 1.7775 against the kiwi, not far from a 4-day low of 1.7763 seen at 5:15 pm ET. The euro is poised to find support around the 1.75 area.

Looking ahead, the Bank of England Deputy Governor Ben Broadbent testifies on the use of the Retail Price Index before the Economic Affairs Committee in London at 10:35 am ET.

At 2:00 pm ET, the Bank of Canada Senior Deputy Governor Carolyn Wilkins will take part in a panel discussion titled «Empowering Women in the Workplace» at an International Monetary Fund seminar in Bali.

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