Forex News: Euro Falls As US-China Tensions Escalate

Euro Falls As US-China Tensions Escalate

(RTTNews) - The euro weakened against most major currencies in the European session on Tuesday, as trade tensions between the U.S. and China escalated, and traders monitored ongoing political upheaval in France.

China's commerce ministry said it remained open to talks, but the U.S. cannot seek dialogue while threatening new measures.

"If you wish to fight, we shall fight to the end; if you wish to negotiate, our door remains open," according to an official statement.

Also, Beijing reportedly said it was Washington's expansion of curbs on Chinese firms in late September that ratcheted up tensions and drove it to further tighten its grip on the critical minerals.

Investors also digested a slew of weak regional data and braced for an address by Federal Reserve Chair Jerome Powell as well as earnings from Wall Street's biggest banks.

Germany's consumer price inflation rose for the second consecutive month in September, as initially estimated, final data from Destatis revealed earlier today.

The consumer price index rose 2.4 percent year-on-year following a 2.2 percent increase in August. The statistical office confirmed the estimate published on September 30.

Inflation, based on the EU measure of harmonized index of consumer prices or HICP, accelerated sharply to 2.4 percent, as estimated, from 2.1 percent in August.

The German ZEW economic sentiment index came in at 39.3, below expectations for a reading of 40.5 in October.

In the European trading today, the euro fell to a 5-day low of 1.1543 against the U.S. dollar and an 8-day low of 175.36 against the yen, from early highs of 1.1594 and 176.46, respectively. The euro may test support near 1.14 against the greenback and 171.00 against the yen.

Against the Swiss franc, the euro edged down to 0.9282 from an early high of 0.9309. On the downside, 0.91 is seen as the next support level for the euro.

Meanwhile, the euro advanced to 0.8720 against the pound, from an early 6-day low of 0.8667. The next possible upside target for the euro is seen around the 0.86 region.

Looking ahead, Canada building permits for August, U.S. NFIB business optimism index for September and U.S. Redbook report is slated for release in the New York session.

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