The euro declined against its key counterparts in the European session on Wednesday, following a media report that the European Central Bank is likely to revise down its economic growth forecasts when it concludes its monetary policy meeting tomorrow.
The ECB is expected to cut its 2018 and 2019 GDP growth forecasts given lingering risks from protectionist policy, according to a report from Bloomberg.
The bank’s June projections showed a growth of 2.1 percent in 2018, 1.9 percent in 2019, and 1.8 percent in 2020.
Although the slight downgrade is unlikely to derail the ECB’s plans to normalize policy till now, it may warrant some caution if this continues into 2019, the report showed.
Data from Eurostat showed that Eurozone industrial production decreased for the second straight month in July.
Industrial output slid 0.8 percent month-on-month in July, the same pace of decline as seen in June. Economists had forecast a moderate drop of 0.5 percent.
The currency traded mixed against its major opponents in the Asian session. While it fell against the greenback and the yen, it held steady against the pound and the franc.
The euro fell back to 1.1572 against the greenback, compared to 1.1604 hit late New York Tuesday. If the euro falls further, 1.13 is likely seen as its next support level.
The euro that closed Tuesday’s trading at 129.54 against the yen edged down to 129.00. On the downside, 128.00 is possibly seen as the next support level for the euro.
Pulling away from a high of 1.1304 hit at 4:00 am ET, the euro retreated to 1.1269 against the franc. The euro is seen finding support around the 1.09 mark.
Having advanced to 1.7823 against the kiwi at 8:45 pm ET, the euro reversed direction and edged down to 1.7746. Next key support for the euro is seen around the 1.74 region.
The single currency dropped to a 2-day low of 1.6261 against the aussie and near a 2-week low of 1.5107 against the loonie, from its early highs of 1.6340 and 1.5164, respectively. The euro is poised to find support around 1.60 against the aussie and 1.49 against the loonie.
On the flip side, the euro recovered to 0.8922 against the pound, from a low of 0.8888 hit at 4:30 am ET. Further uptrend may take the euro to a resistance around the 0.91 level.
Developments in China are a source of one of the bigger risks for the global economy, Bank of England Governor Mark Carney said in an interview to BBC to mark the 10th anniversary of the global financial crisis.
“China is a great source of growth for the global economy, it is an absolute economic miracle, lots of positives,” Carney said.
Looking ahead, the Federal Reserve’s Beige book report is scheduled for release at 2:00 pm ET.