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.