Euro Falls On Weak German ZEW Economic Sentiment Index, China Tech Worries
06 July 2021 - 6:02PM
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The euro dropped against its major counterparts in the European
session on Tuesday, as a decline in German economic sentiment
indicator for July and China's crackdown on the technology
companies weighed on the currency.
Survey data from the ZEW - Leibniz Centre for European Economic
Research showed that German economic confidence weakened to a
six-month low in July
The ZEW Indicator of Economic Sentiment declined sharply to 63.3
in July from 79.8 in the previous month. This was the lowest score
since last January, when the score was 61.8 and also below
economists' forecast of 75.2.
Chinese regulators announced a cybersecurity investigation of
U.S.-listed companies such as Boss Zhipin and subsidiaries of Full
Truck Alliance on Monday. This came after the regulator ordered the
removal of ride-hailing giant DiDi Global's app from mobile app
stores in China, alleging that it had illegally collected users'
personal data.
Inflation worries intensified following a spike in oil prices,
as talks between the OPEC and its allies broke down on Monday.
The euro declined to near a 2-week low of 0.8547 against the
pound, fresh 2-week low of 131.06 against the yen and a 4-day low
of 1.1831 against the greenback, off its prior highs of 0.8569 and
131.86, and a 6-day high of 1.1895, respectively. The currency may
face support around 0.84 against the pound, 128.00 against the yen
and 1.15 against the greenback.
The European currency touched 1-1/2-month lows of 1.6703 against
the kiwi and 1.5616 against the aussie, down from its early highs
of 1.6894 and 1.5756, respectively. On the downside, 1.65 and 1.53
are possibly seen as its next support levels against the kiwi and
the aussie, respectively.
The euro retreated from its previous highs of 1.0945 against the
franc and 1.4646 against the loonie and was trading at 1.0925 and
1.4617, respectively. The euro is seen locating support around 1.07
against the franc and 1.44 against the loonie.
Looking ahead, U.S. ISM services PMI for June will be featured
in the New York session.
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