Euro Declines On Weak German Data

Euro Declines On Weak German Data


The euro slipped against other major currencies in the European session on Wednesday as sentiment waned after German exports and industrial production data for June declined more than forecast.
German exports and imports declined more than expected in June, the latest figures from the Federal Statistical Office showed.
Exports fell 1.5 percent on a monthly basis, compared to a forecast of 1.3 percent drop. This followed a 4.2 percent gain in the previous month, which is revised from a 3.9 percent increase reported earlier.
Imports fell 3 percent month-on-month following a 6.2 percent rise in the preceding month.
However, the trade balance showed a surplus of EUR 17.9 billion compared to expectations of EUR 14.6 billion.
Also, data from the Ministry of Economics and Technology showed that Germany's industrial production decreased from the previous month in June.
Industrial production decreased a calendar and seasonally adjusted 0.9 percent on a monthly basis in June, reversing the previous month's revised 1.7 percent increase. Economists were looking for a 0.8 percent decline for June.
Compared to June 2011, industrial production dropped 0.3 percent in June. Economists were looking for a 0.3 percent annual increase.
The euro was also under pressure after ratings agency Standard & Poor's increased the pressure of Greece's political leaders to enact debt reform, by placing the country on "negative" credit outlook.
S&P also affirmed its Triple-C foreign credit rating and C-Local rating for Greece.
The euro is now trading at a 5-day low of 0.7893 against the pound and a 2-day low of 1.2349 against the U.S. dollar, compared to yesterday's close of 0.7939 and 1.2400, respectively. The next support level of the euro is seen at 0.785 against the pound and 1.23 against the greenback.
The Bank of England lowered growth estimate for the U.K. as fiscal consolidation and Eurozone debt crisis weigh on demand.
In its quarterly Inflation Report, the BoE said economic growth is likely to be around 2 percent in two years, down from the 2.6 percent expansion estimated in May.
Against the Japanese yen, the euro is presently trading at a 5-day low of 96.61 with 96.00 seen as the next downside target level. At Tuesday's close, the pair was worth 97.48.
Japan saw a current account surplus of 433.3 billion yen in June, the Ministry of Finance said - down 19.6 percent on year.
That topped forecasts for a surplus of 415.4 billion yen and a 24.9 percent annual contraction after showing a surplus of 215.1 billion and a 62.6 percent plunge in May.
The European single currency eased against the NZ dollar after advancing to a 12-day high of 1.5267 at 1:45 am ET. The euro-kiwi pair is now trading at 1.5176, compared to 1.5198 hit late New York Tuesday. On the downside, the euro may target the 1.51 level.
The euro hit a 5-day low of 1.2317 against the Canadian dollar and the next downside target level for the euro is seen at 1.23. The euro-loonie pair closed Tuesday's deals at 1.2364.
Against the Australian dollar, the euro is now worth 1.1708, down from yesterday's closing value of 1.1753. If the euro declines further, it may target the 1.165 level.
But the euro traded in tight range against the Swiss franc, moving between 1.2018 and 1.2013. The pair finished yesterday's deals at 1.2015.
Switzerland's consumer confidence deteriorated between April and July, contrary to economists' forecast for an improvement, mainly due to more pessimistic expectations with regard to future economic development and unemployment, a survey by the State Secretariat for Economic Affairs (SECO) showed.
The consumer confidence index dropped to -17 points in April-July from -8 points in three months to April. The latest reading was lower than than -4 points economists had expected.
The U.S. Labor Department is scheduled to release its preliminary report on second quarter non-farm productivity and unit labor costs at 8:30 am ET.


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