2023.07.0606:16:00UTC+00Euro Falls On Risk Aversion

The European currency weakened against other major currencies in the Asian session on Thursday on risk aversion, as investors reacted to the latest U.S. Fed policy meeting minutes that showed most officials would support further interest rate hikes going ahead, despite the pause in June. Disappointing service sector data from China and the Europe weighed as well.

The minutes also stated that the members disagreed on rate hikes. After the June meeting, all but two of the 18 participants expected that at least one hike would be appropriate this year, and 12 expected two or more hikes.

In the Asian trading today, the euro fell to near 2-week lows of 0.9738 against the Swiss franc and 156.18 against the yen from yesterday's closing quotes of 0.9753 and 156.99 respectively. If the euro extends its downtrend, it may find support around 0.95 against the franc and 154.00 against the yen.

Moving away from a recent high of 0.8546 against the pound, the euro fell to nearly a 2-week low of 0.8536. The euro may test support near the 0.82 region.

Against the U.S. and the New Zealand dollars, the euro dropped to 3-week lows of 1.0834 and 1.7504 from yesterday's closing quotes of 1.0854 and 1.7559 respectively. On the downside, 1.06 against the greenback and 1.71 against the kiwi are seen as the next support levels for the euro.

The euro edged down to 1.6261 against the Australian dollar from Wednesday's closing value of 1.6308. The next support level for the euro is seen around the 1.58 region.

Against the Canadian dollar, the euro dropped to 1.4409 from a recent high of 1.4422. The euro could test support near the 1.41 region.

Looking ahead, German factory orders for May is due to be released at 2:00 am ET in the pre-European session.

In the European session, PMI reports from different European economies and U.K., for June and Eurozone retail sales data for May are slated for release.

In the New York session, U.S. MBA weekly mortgage approvals data for June, U.S. weekly jobless claims data, Canada and U.S. trade data for May, U.S. and Canada PMI data for June and U.S. EIA crude oil inventory data are set to be published.