The euro declined against the currencies of U.S., Japan and Switzerland in European deals on Tuesday on increasing worries over quake-hit nuclear power plants in Japan.
Asian and European stocks declined today on news of another explosion at Fukushima Daichi nuclear plant in Japan, where the explosion was at it no.4 reactor, following radiation leaks from nuclear reactor no.2, and comments from Japanese Prime Minister Naoto Kan, urging people within a radius of 30 kilometers to stay indoors amid fears of more radiation leaks.
The Bank of Japan said its monthly report that the Japanese economy is emerging from the current deceleration phase and it is expected to return to a moderate recovery path.
But the central bank cautioned that production is likely to decline for the time being due to the massive earthquake and tsunami that struck the north-eastern part of the island nation last week. Moreover, there is concern that the sentiment of firms and households might deteriorate.
Germany’s DAX is currently trading lower by 4.7 percent, France’s CAC 40 index is down by 3.4 percent and U.K.’s FTSE 100 index is falling by 2.8 percent.
The euro weakened against the yen in European deals on Tuesday. As of now, the euro-yen pair is worth 113.08 with 112.5 seen as the next downside target level. The pair closed yesterday’s trading at 114.23.
During European deals on Tuesday, the euro slipped against the US dollar. Currently, the euro-dollar pair is trading at a 4-day low of 1.3885, compared to yesterday’s closing value of 1.3994. The next downside target level for the euro is seen at 1.375.
The euro declined against the Swiss franc in European deals on Tuesday. The euro-franc pair that closed yesterday’s trading at 1.2935 is now worth 1.2795. This set the lowest point for the euro since March 02. If the euro weakens further, it may likely target the 1.275 level.
The euro that dropped to a 4-day low of 0.8628 against the pound at 12:00 am ET Tuesday showed choppy trading thereafter, but the European currency gained after 3.30 am ET. Currently, the euro-pound pair is worth 0.8665. On the upside, 0.869 is seen as the next target level for the euro. The euro-pound pair closed yesterday’s trading at 0.8654.
Traders are now likely to focus on the Eurozone fourth quarter employment data and the German ZEW economic sentiment index for March, which are due at 6 am ET.
From the U.S., import and export price indexes for February, results of the New York Federal Reserve’s empire state manufacturing survey for March, Treasury Department’s report on the flows of instruments into and out of the U.S. for January and NAHB housing market index for March are expected in the New York morning session.
The Federal Open Market Committee is scheduled to commence a 1-day meeting, with the central bank expected to make an announcement regarding its near-term direction of monetary policy at 2:15 pm ET.