Euro Weakens Against Majors

The euro declined against its major rivals in European deals on Wednesday, as the sell-off in oil and other commodities raised the appeal of safe-haven German bunds, pushing yields down.

The benchmark 10-year German bund yield fell 0.62 percent, while that of 20-year note were lower by 1.34 percent. Yields move inversely to bond prices.

Oil has been weighed by Saudi’s plans to sustain the strategy of maintaining oil output and the prospectus of return of Iranian crude to the global market when sanctions are lifted.

Data from the American Petroleum Institute on late Tuesday showed a rise of almost 3 million barrels in crude supplies in the week ended December 25. The closely-watched survey from the Energy Information Administration is slated for release later in the day.

In other economic news, Eurozone money supply increased at a slower pace in November and annual growth in loans to households improved from October, according to a report from the European Central Bank.

The broad monetary aggregate M3 climbed 5.1 year-on-year in November, slower than October’s 5.3 percent increase and a 5.2 percent rise forecast by economists.

The currency was almost flat in the Asian session.

In European trading now, the euro slipped to a 2-day low of 1.0814 against the franc, from a high of 1.0851 hit at 12:15 am ET. The single currency is seen finding support near the 1.06 area.

The euro pared gains to 1.0915 against the greenback, 0.7369 against the pound and 131.45 against the yen, from its early highs of 1.0944, 0.7385 and 131.80, respectively. If the euro extends slide, it is likely to find support around 1.08 against the greenback, 0.72 against the pound and 130.00 against the yen.

The euro eased back to 1.4951 against the aussie, 1.5910 against the kiwi and 1.5133 against the loonie, from its previous highs of 1.5021, 1.5985 and 1.5170, respectively. On the downside, the euro is likely to find support around 1.48 against the aussie, 1.58 against the kiwi and 1.49 against the loonie.

Looking ahead, U.S. pending home sales data for November is due to be released in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com

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