The euro and the pound drifted lower against their major counterparts in the European session on Monday amid risk aversion, weighed by the U.S. President Donald Trump’s executive order restricting immigration from seven Muslim-majority countries.
Trump’s latest executive order banned immigration from Iraq, Iran, Libya, Somalia, Sudan, Yemen, and Syria for the next 90 days. Trump also suspended the refugee program for four months and blocked Syrians from entering the nation for an indefinite period of time.
Trump showed no sign of backing down and defended his controversial ban over the weekend as being “not about religion” as a global backlash against his immigration curbs gathered strength.
Caution ahead of monetary policy decisions in the U.S., U.K. and Japan as well as Chinese manufacturing data and U.S. jobs data due this week also kept investors nervous.
Crude oil prices extended declines as signs of growing output in the United States overshadowed renewed optimism over the execution of the OPEC-non OPEC oil deal.
In economic front, data from the Confederation of British Industry showed that the U.K. private sector growth eased in three months to January, although retailers reported decent growth and output growth remained robust among manufacturers. The corresponding growth indicator fell to +10 percent from +17 percent in December.
Monthly survey data from the European Commission showed that Eurozone economic confidence strengthened in January.
The economic confidence index rose to 108.2 in January from 107.8 in December. The score was expected to remain unchanged at 107.8.
In Asian trading, the euro was higher against its major rivals, barring the Japanese yen.
The pound showed mixed performance in the previous session. While the currency rose against the greenback, it dropped against the yen. On the other hand, it held steady against the Swiss franc.
The euro eased to 1.4153 against the aussie, 1.4729 against the kiwi and 1.4052 against the loonie, from its early high of 1.4216, 4-day high of 1.4782 and a 5-day high of 1.4100, respectively. If the euro extends decline, it may find support around 1.40 against the aussie, 1.46 against the kiwi and 1.38 against the loonie.
The 19-nation currency retreated to 1.0687 against the greenback and 1.0674 against the Swiss franc, from its previous 4-day highs of 1.0740 and 1.0699,respectively. Continuation of the euro’s downtrend may see it challenging support around 1.05 against the greenback and 1.04 against the franc.
Pulling away from an early high of 123.13 against the yen, the euro edged down to 122.56. Further weakness may see the euro challenging support around the 119.00 region.
Following a similar trend, the pound declined to 5-day lows of 0.8550 against the euro and 1.2510 versus the dollar, coming off from its prior highs of 0.8502 and 1.2600, respectively. The pound is seen finding support around 0.87 against the euro and 1.24 against the greenback.
The pound reversed from its early highs of 1.2571 against the Swiss franc and 144.62 against the yen, falling to a 6-day low of 1.2490 and a 4-day low of 143.51, respectively. The next possible support levels for the pound are seen around 1.24 against the franc and 142.00 against the yen.
Looking ahead, German flash CPI data for January, U.S. personal income and spending data for December and pending home sales data for December are slated for release in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com
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