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2017.08.1006:59:00UTC+00Euro Falls As Risk Aversion Intensifies

The euro declined against its key counterparts in the early European session on Thursday, as European shares declined on mounting tensions between the United States and North Korea, with Pyongyang branding Trump "bereft of reason" and detailing plans to launch missiles towards the US territory of Guam.

North Korea hit back at Trump's "fire and fury" warning, saying that "sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him."

The commander of North Korea's Korean People's Army General Kim Rak-Gyom outlined a plan to fire four medium-range Hwasong-12 missiles that will cross the sky of Japan and hit the sea around Guam, North Korean state news service KCNA reported.

The statement added that Pyongyang would finalize the plan by mid-August and sent to Kim Jong-un to get "his order."

The currency rose against its major rivals in the Asian session, with the exception of the Swiss franc.

The single currency pared gains to 128.59 against the yen, from a high of 129.55 hit at 9:00 pm ET. Continuation of the euro's downtrend may see it challenging support around the 126.00 region.

Data from the Ministry of Economy, Trade and Industry showed that Japan's tertiary activity remained flat in June.

The tertiary industry activity index held steady in June, following a 0.1 percent drop in May. Economists had forecast a 0.2 percent growth for June.

The euro dropped to 1.1300 against the Swiss franc and 1.1704 versus the greenback, from its early high of 1.1342 and a 2-day high of 1.1770, respectively. The next possible support for the euro is seen around 1.11 against the franc and 1.14 against the greenback.

The euro slid to a 6-day low of 0.9008 against the pound, after having advanced to 0.9047 at 3:45 am ET. The next possible support for the euro-pound pair is seen around the 0.89 mark.

Data from the Office for National Statistics showed that the UK visible trade deficit widened to a 9-month high in June.

Trade in goods resulted in a shortfall of GBP 12.72 billion in June compared to GBP 11.31 billion deficit in May.

The euro came off from an early session's high of 1.4937 against the loonie with the pair trading at 1.4918. The euro is seen finding support around the 1.47 level.

Looking ahead, Canada new housing price index for June, U.S. weekly jobless claims for the week ended August 5 and U.S. PPI for July are slated for release in the New York session.

At 10:00 am ET, Federal Reserve Bank of New York President William Dudley is scheduled to hold a press conference about regional wage inequality at the Federal Reserve Bank of New York.

At 2:00 pm ET, U.S. Federal Reserve's monthly budget statement for July is scheduled to publish.

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