CANBERA (Alliance News) – The euro slipped against its major counterparts in the European session on Thursday amid risk aversion, as oil prices fell after news that the OPEC members agreed for a nine-month extension to the oil production curbs, lacking any surprises for deeper cuts. Oil prices retreated after Saudi Arabia’s oil minister Khalid al-Falih rejected the notion of deeper cuts to oil production at the ongoing meeting of OPEC and 11 non-OPEC countries in Vienna. The agreement to extend output cuts by another nine months failed to inspire market participants, who had been expecting deeper cuts. A formal announcement is expected after 11 am Eastern Time. Investors digested Fed minutes that showed the likelihood of another hike in June, but conditional on recent economic softness proving transitory. Policy makers also discussed scaling back their USD4 trillion-plus holdings of mortgage-backed bonds and longer-term US government bonds. Final data from the statistical office INE showed that Spain’s economic growth improved slightly, as estimated, in the first quarter. Gross domestic product grew 0.8% sequentially in the first quarter, in line with preliminary estimate. The pace of expansion accelerated from 0.7% seen in the fourth quarter of 2016. The euro was higher against its major rivals in the Asian session. The euro edged down to 1.1201 against the greenback, after having advanced to a 2-day high of 1.1250 at 4:30 am ET. The euro is likely to target 1.11 as the next support level. Reversing from an early 2-day high of 0.8667 against the pound, the euro eased to 0.8646. If the euro-pound pair extends fall, it may target 0.84 as the next support level. The second estimate from the Office for National Statistics showed that the UK economy expanded less than previously estimated in the first quarter. Gross domestic product grew 0.2% sequentially in the first quarter instead of 0.3% estimated on April 28. The euro weakened to a 3-day low of 1.0892 against the franc, off its early high of 1.0929. Continuation of the euro’s downtrend may see it challenging support around the 1.07 area. The euro, having advanced to a 9-day high of 125.81 against the yen at 3:45 am ET, reversed direction and edged down to 125.22. The next possible support for the euro-yen pair is seen around the 122.5 area. The euro eased back to 1.5042 against the loonie, 1.5926 against the kiwi and 1.4996 against the aussie, from its early high of 1.5114 and multi-day highs of 1.6005 and 1.5063,respectively. Further weakness may take the euro to support levels of around 1.48 against the loonie, 1.55 against the kiwi and 1.48 against the aussie. Looking ahead, at 10:00 am ET, the Federal Reserve Governor Lael Brainard participates in a panel discussion titled “A Conversation with former Treasury Under Secretaries for International Affairs,” in Washington DC. At 1:00 pm ET, the European Central Bank Vice President Vitor Constancio gives lecture at Instituto Superior de Economia e Gestao (ISEG) Master in Monetary and Financial Economics in Lisbon, Portugal.
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