Euro Eases Amid Risk Aversion
31 August 2015 - 4:15PM
RTTF2
The euro edged down against its major rivals in European deals
on Monday, erasing its early gains, as prospectus of higher U.S.
rates and concerns over withdrawal of more support from the Chinese
government to avert stock market turmoil pressurized European
stocks.
At the annual gathering in Jackson Hole, Wyoming, the Fed
officials left the door open for an interest rate hike in
September, despite the recent turmoil in global markets.
In an interview with CNBC, Federal Reserve Vice Chairman Stanley
Fischer said Friday that it was too early to tell if the Fed will
raise interest rates in September, but noted that the central bank
is heading in the direction of raising rates.
Chinese stock plunged after Financial Times reported that
China's government would not take measures to boost the stock
market through large scale share purchases, but would rather step
up efforts to find and punish those suspected of "destabilising the
market."
China will release tomorrow official PMI for August and
investors wait to see if the world's second largest economy is
heading for a hard landing.
The preliminary data from Eurostat showed that Eurozone
inflation remained unchanged in August.
Inflation came in at 0.2 percent in August, the same rate as
seen in July and June. It was forecast to ease to 0.1 percent.
Excluding energy, food, alcohol and tobacco, core inflation was
stable at 1 percent in August. It was expected to ease to 0.9
percent.
The euro was trading in a positive territory in the previous
session.
In European trading, the euro pared gains to 135.80 against the
yen, 1.1196 against the greenback and 1.4836 against the loonie,
reversing from its early highs of 136.35, 1.1261 and 1.4907,
respectively. The euro is likely to find support around 134.5
against the yen, 1.10 against the greenback and 1.474 against the
loonie.
The euro eased back to 0.7261 against the pound, heading to
pierce its early 1-week low of 0.7244. This may be compared to an
early high of 0.7297. On the downside, the euro may challenge
support around the 0.70 mark.
On the flip side, the euro advanced to 1.0806 against the franc,
following a decline to 1.0740 at the beginning of today's Asian
session. The euro is seen finding resistance around the 1.09
level.
Looking ahead, Chicago PMI for August is to be published at 9:45
am ET.
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