Euro Falls Amid Risk Aversion
August 28 2024 - 12:05AM
RTTF2
The euro weakened against other major currencies in the Asian
session on Wednesday amid risk aversion, as markets in Australia,
New Zealand, Japan, South Korea, Hong Kong, Singapore, Taiwan and
China all declined. Traders remain cautious and await the release
of key U.S. inflation report later in the week, which could impact
expectations for how quickly the U.S. Fed will cuts interest
rates.
Weakness in mining and energy stocks amid tumbling commodity
prices, also weighed on the investor sentiment.
Crude oil prices fell after three successive days of strong
gains, consolidating ahead of supply data due out later today. West
Texas Intermediate Crude futures for October slumped $1.89 or 2.5
percent at $75.53 a barrel.
All eyes remain on AI darling Nvidia, which will release its
fiscal second quarter results after the close of U.S. trading later
in the day.
The highly anticipated earnings report will provide a key test
for the AI demand story.
Traders also look ahead to the release of Commerce Department's
report on personal income and spending for July on Friday, which
includes readings on inflation said to be preferred by the Federal
Reserve.
Economists currently expected the report to show the annual rate
of consumer price growth was unchanged at 2.5 percent.
The annual rate of core consumer price is expected to tick up to
2.7 percent in July from 2.6 percent in June.
With inflation nearly defeated and the job market cooling, the
inflation reading could impact expectations for how quickly the Fed
cuts rates.
In the Asian trading today, the euro fell to a 5-day low of
1.1135 against the U.S. dollar and a 2-day low of 160.85 against
the yen, from yesterday's closing quotes of 1.1184 and 160.99,
respectively. If the euro extends its downtrend, it is likely to
find support around 1.09 against the greenback and 158.00 against
the yen.
Against the pound and the Swiss franc, the euro slipped to
nearly a 4-week low of 0.8420 and nearly a 3-week low of 0.9402
from Tuesday's closing quotes of 0.8432 and 0.9411, respectively.
The euro may test support near 0.82 against the pound and 0.92
against the franc.
Against Australia, the New Zealand and the Canadian dollars, the
euro dropped to more than a 1-month low of 1.6408, nearly a
1-1/2-month low of 1.7856 and more than a 2-week low of 1.4996 from
Tuesday's closing quotes of 1.6464, 1.7883 and 1.5031,
respectively. On the downside, 1.59 against the aussie, 1.77
against the kiwi and 1.47 against the loonie are seen as the next
support levels for the euro.
Looking ahead, the European Central Bank is slated to release
monetary aggregates for July at 4:00 am ET in the European
session.
In the New York session, U.S. MBA weekly mortgage approvals data
and U.S. EIA weekly crude oil data are slated for release.
Euro vs AUD (FX:EURAUD)
Forex Chart
From Aug 2024 to Sep 2024
Euro vs AUD (FX:EURAUD)
Forex Chart
From Sep 2023 to Sep 2024