The euro fell against its major rivals in early European trading on Thursday, after the European Central Bank governing council member Erkki Liikanen signaled that the bank is willing to deploy additional measures, if risks to growth and inflationary outlook deteriorates further.
Liikanen, who also serves as the governor of the Bank of Finland, said that the recent ECB decision extending the asset purchase program at last week’s meeting is providing a strong message to markets that it is ready to use more measures to support growth.
German bund yields also fell, with the benchmark yield on 10-year note down 0.58 percent, while that of 20-year note slipped 1.27 percent.
European markets are trading mixed, with commodities under continued pressure, and crude oil plunging again on persistent fears over supply glut.
The currency was supported at the beginning of today’s trading, after the comments from European Central Bank member Ewald Nowotny, who said the financial community had unrealistic expectations for more ECB stimulus last week.
In European trading, the euro slipped to a weekly low of 133.08 against the yen, down from a high of 134.12 hit at 6:45 pm ET. On the downside, 132.00 is possibly seen as next support level for the euro.
Business sentiment in Japan weakened notably in three months to December, according to the quarterly survey by the Ministry of Finance and the Cabinet office.
The Business Survey Index, or BSI, for all industrial fell to 4.6 points from 9.6 in the third quarter. Nonetheless, it is forecast to rise to 5.6 points in the coming quarter.
The 19-nation currency that ended Wednesday’s trading at 0.7258 against the pound weakened to a 2-day low of 0.7205. The euro is seen finding support around the 0.71 mark.
Data from the Office for National Statistics showed the U.K. visible trade deficit widened to a three-month high in October on rising imports.
The visible trade deficit increased more-than-expected to GBP 11.8 billion from GBP 8.8 billion in September. This was the highest shortfall since July, when it totaled GBP 12.2 billion.
The common currency weakened to 1.0934 against the greenback, off its prior high of 1.1025. The next possible support for the euro-greenback pair may be located around the 1.08 region.
Reversing from an early high of 1.4970 against the loonie, the euro edged down to 1.4819. Further weakness may take the euro to a support around the 1.47 area.
The single currency weakened to a 2-day low of 1.4999 against the aussie, after having advanced to 1.5256 at 6:00 pm ET. Continuation of the euro’s downtrend may see it challenging support around the 1.48 level.
Data from the Australian Bureau of Statistics showed that the jobless rate in Australia slipped to a seasonally adjusted 5.8 percent in November.
That handily beat forecasts for 6.0 percent and was down from 5.9 percent in October.
Extending early fall, the euro hit a 3-day low of 1.6230 against the kiwi, compared to Wednesday’s closing value of 1.6391. The euro-kiwi pair may possibly find support around the 1.60 zone.
On the flip side, the euro recovered from its 2-day low of 1.0801 against the Swiss franc with the pair trading at 1.0827.
The Swiss National Bank retained its key interest rates in negative territory and reiterated that the Swiss franc is still significantly overvalued.
The interest rate on sight deposit at the central bank was maintained at -0.75 percent, and the target range for the three-month libor between -1.25 percent and -0.25 percent.
Looking ahead, the Bank of England’s interest rate decision is due at 7:00 am ET. Economists forecast the bank to hold interest rate at 0.50 percent and asset purchase target at GBP 375 billion.
Canada new housing price index for October, U.S. export and import price indices for November, weekly jobless claims for the week ended December 5 and monthly budget statement for November are to be published in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com