The euro retreated from its early highs against its key counterparts in the European session on Friday, as investors became concerned about renewed weakness in the lira and the fate of upcoming U.S.-China trade talks.
The United States has warned of more sanctions against Turkey, triggering a sell-off in Lira.
In a message on Twitter, the U.S. President Donald Trump said that Turkey had “taken advantage of the United States for many years” and that he was “cutting back on Turkey”.
Meanwhile, the Wall Street Journal reported that the trade talks in Washington would take place on Aug. 21 and 22, just before the next round of levies targeting $16 billion worth of goods on both sides kick in on Aug. 23.
In economic releases, data from the European Central Bank showed that the euro area current account surplus remained unchanged in June.
The current account surplus totaled a seasonally adjusted EUR 24 billion in June, the same as seen in May.
Meanwhile, final data from Eurostat showed that Eurozone inflation accelerated for a third straight month in July, as initially estimated, to its highest level since late 2012.
The harmonized index of consumer prices rose 2.1 percent year-on-year in July, after climbing 2 percent in June. The rate came in line with the estimate published on July 31.
The latest inflation figure was the highest since December 2012.
The currency traded mixed against its major opponents in the Asian session. While it rose against the greenback and the franc, it held steady against the yen and the pound.
The euro eased to 1.1374 against the greenback, from a 3-day high of 1.1419 hit at 3:00 am ET. The next possible support for the euro is seen around the 1.11 level.
The single currency edged down to 125.67 against the yen, after rising to 126.43 at 3:00 am ET. The euro is poised to find support around the 124.00 area.
The 19-nation currency retreated to 1.1332 against the franc and 0.8953 against the pound, off its early weekly highs of 1.1367 and 0.8971, respectively. If the euro drops further, 1.12 and 0.88 are possibly seen as its next support levels against the franc and the pound, respectively.
The 19-nation currency reversed from its early high of 1.7285 against the kiwi and weakened to 1.7239. Next key support for the euro is seen around the 1.70 region.
Data from Statistics New Zealand showed that New Zealand’s producer price outputs rose 0.9 percent on quarter in the second quarter of 2018.
That follows the 0.2 percent increase in the three months prior.
Looking ahead, Canada CPI for July and University of Michigan’s preliminary consumer sentiment index for August are scheduled for release in the New York session.