Euro Slides As German Investor Morale Deteriorates On Coronavirus Fears
The euro fell sharply against its major counterparts in the European session on Tuesday, as German investor sentiment worsened in February to the weakest since November last year, citing worries about the coronavirus outbreak in China.
Survey results from the ZEW – Leibniz Centre for European Economic Research showed that the investor confidence indicator slumped to 8.7 from 26.7 in January. The February reading was much worse than the 21.5 economists had expected.
For Eurozone, the investor confidence index dropped sharply to 10.4 from 25.6 in January. Economists had forecast a reading of 30 for the month.
The sell-off in the euro further intensified amid falling European shares, as Apple said it would not meet its revenue guidance for the second quarter due to slower iPhone production.
The euro exhibited mixed trading in the previous session, by falling against the greenback and the yen but holding steady against the franc and the pound.
The euro was down at 1.0822 versus the dollar, its lowest level since April 2017. That marked a 0.1 percent drop from yesterday’s closing value of 1.0835. The euro is seen finding support around the 1.06 mark.
The EUR/JPY pair dropped 0.3 percent, touching more than a 4-month low of 118.71. At Monday’s close, the pair was valued at 119.05. Immediate support for the euro is possibly seen around the 116.00 level.
The euro weakened to a session’s low of 0.8303 against the pound, after a rally to 0.8348 at 3:45 am ET, the highest since February 13. The pair had finished yesterday’s trading at 0.8330. On the downside, support is seen near the 0.80 mark.
The single currency pulled back to 1.4348 against the loonie and 1.6191 against the aussie, from a 4-day high of 1.4371 and a 6-day high of 1.6229, respectively seen earlier in the trading session. At yesterday’s trading close, the euro was worth 1.4339 a loonie and 1.6138 per aussie. Further decline in the euro may locate support around 1.40 against the loonie and 1.58 against the aussie.
After a brief rise to 1.0629 against the franc, the euro dropped back and held near a 4-day low of 1.0615. The euro was trading at 1.0621 versus the franc at Monday’s close. The euro is likely to face support around the 1.04 region, if it depreciates further.
On the flip side, the euro was higher at a 6-day high of 1.6946 against the kiwi, as worries about Apple’s profit warning knocked down the Asian currency. The euro-kiwi pair was trading at 1.6833 at yesterday’s close. Next near-term resistance for the euro is likely seen around the 1.72 level.
On the economic front, Canada manufacturing sales for December, New York Fed’s empire manufacturing data and NAHB housing market index for February are scheduled for release in the New York session.
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