The euro continued to be weak against most major currencies in the Asian session on Tuesday amid risk aversion, as the post-Brexit relief rally faded and commodities such as oil, copper and aluminum slipped after recent gains on expectations of central bank stimulus.
The U.K.’s FTSE 100 index is currently down 0.60 percent or 39.08 points at 6,483, France’s CAC 40 index is down 1.62 percent or 68.49 points at 4,166 and Germany’s DAX is down 1.63 percent or 158.20 points at 9,550.
The decision to leave the European Union might take a massive toll on the U.K. economy, with GDP likely to drop by anywhere between 1.5 and 4.5 percentage points by 2019, IMF chief Christine Lagarde said in an interview published in Le Monde newspaper on Monday.
The head of the U.K. Independence Party, Nigel Farage, resigned Monday as party leader, saying his “political ambition had been achieved”. “During the referendum campaign I said I want my country back. Now I want my life back,” he added.
The struggling Italian banking system is back in focus amid reports that the country could defy EU rules and pump billions of euros of public money into its lenders, although a spokesman for Prime Minister Matteo Renzi denied these reports.
In other economic news, data from Markit Economics showed that the euro area composite output index came in at 53.1 in June, the same as in May, but above the flash score of 52.8. The services Purchasing Managers’ Index fell to 52.8 in June from 53.3 in the prior month. According to flash estimate, the reading dropped to 52.4.
Data from Eurostat showed that Eurozone retail sales climbed 0.4 percent month-over-month in May, following a 0.2 percent rise in April instead of a flat reading initially estimated. On an annual basis, retail sales growth accelerated to 1.6 percent in May from 1.4 percent in the previous month. That was below economists’ expectations for a 1.7 percent gain.
In the Asian session today, the euro fell against its most major rivals.
In the European trading, the euro fell to a 6-day low of 113.15 against the yen and a 5-day low of 1.0805 against the Swiss franc, from early early highs of 114.38 and 1.0835, respectively. If the euro extends its uptrend, it is likely to find support around 109.00 against the yen and 1.06 against the franc.
Against the U.S. dollar, the euro dropped to 1.1130 from an early near 2-week high of 1.1185. The euro may test support near the 1.08 region.
Meanwhile, the euro rose to nearly a 3-year high of 0.8490 against the pound, from an early low of 0.8388. euro is likely to find support around the 0.85 region.
Against the Australian dollar, the euro advanced to 1.4873 from an early more than a 2-month low of 1.4753. The euro may test resistance near the 1.52 region.
The euro edged up to 1.5496 against the NZ dollar, from an early low of 1.5409 and held steady thereafter.
Against the Canadian dollar, the euro climbed to 1.4377 from an early low of 1.4313. On the upside, 1.47 is seen as the next resistance level for the euro.
Looking ahead, at 6:00 am ET, Bank of England Governor Mark Carney will hold a press conference on the Financial Stability Report, in London.
In the New York session, U.S. factory orders data for May is slated for release.
New Zealand’s GDT dairy auction is due to be held at 8:00 am ET.
At 2:30 pm ET, Federal Reserve Bank of New York President William Dudley is expected to speak about the local economy at the Greater Binghamton Chamber of Commerce in New York.
The material has been provided by InstaForex Company – www.instaforex.com