Euro Lower After Weak Eurozone Industrial Output

The euro was trading in a negative territory in European deals on Wednesday, as Eurozone industrial production declined more than expected in February on widespread weakness across sub-sectors.

Data from Eurostat showed that industrial production fell 0.8 percent in February from January, when it grew by revised 1.9 percent. Economists had forecast a 0.7 percent drop. Output for January was revised down from 2.1 percent.

On a yearly basis, industrial output growth eased to 0.8 percent from revised 2.9 percent in January. It was slower than the expected 1.3 percent increase. Nonetheless, production grew for the second straight month.

Traders await Eurozone consumer price inflation on Thursday, which is expected to confirm deflation in March.

German bund yields fell even as European stocks advanced on optimism over strong China trade data. The benchmark 10-year German bund yields dropped 0.15 percent, while 2-year equivalents were lower by 0.51. Yields move inversely to bond prices.

The 2016 annual spring meeting of the International Monetary Fund and World Bank began in Washington, which will be followed by the G20 meeting on April 15-17. The G20 meeting will discuss about the outlook for the global economy and policy measures to promote strong, sustainable and balanced global growth.

The euro showed mixed trading in Asian deals. While it held steady against the franc and the pound, it rose against the yen. Against the greenback, it declined.

The 19-nation currency declined to a 2-week low of 1.1295 against the greenback, and held steady thereafter. The next possible support for the euro-greenback pair is likely seen around the 1.11 mark.

The Commerce Department released a report showing an unexpected decrease in U.S. retail sales in March, primarily reflecting a steep drop in auto sales.

The report said retail sales fell by 0.3 percent in March following a revised unchanged reading in February. Economists had expected sales to inch up by 0.1 percent compared to the 0.1 percent drop originally reported for the previous month.

The single currency slid to near a 2-week low of 0.7925 against the Sterling, after having advanced to 0.7984 at 6:30 pm ET. The euro is seen finding support around the 0.78 zone.

The latest Credit Conditions Survey from the Bank of England showed that demand for secured lending for house purchases and the availability of secured credit to households are set to increase in the second quarter.

Lenders said the availability of secured credit to households remained unchanged in three months to mid-March. They expect availability to increase in the second quarter

The euro edged down to 123.34 against the yen, from a high of 123.86 hit at 10:30 pm ET. On the downside, the euro may challenge support around the 121.00 area.

Data from the Bank of Japan showed that Japan's producer prices fell 0.1 percent on month in March.

That missed forecasts for a flat reading following the downwardly revised 0.3 percent contraction in February.

The common currency fell to 1.6312 against the kiwi, its lowest since March 30. On the downside, the euro may locate support around the 1.60 region.

The euro weakened to a 2-week low of 1.4737 against the aussie and near a 5-week low of 1.4458 against the loonie, off its early highs of 1.4848 and 1.4546, and held steady thereafter. If the euro extends slide, it may find support around 1.46 against the aussie and 1.42 against the loonie.

On the flip side, the euro advanced to a 4-day high of 1.0895 against the Swiss franc, off its previous session's decline of 1.0868. Continuation of the euro's uptrend may take it to a resistance around the region.

Looking ahead, U.S. business inventories for February are slated for release shortly.

The Bank of Canada will announce its interest rate decision at 10:00 am ET. Economists expect the bank to retain interest rates unchanged at 0.50 percent.

At 2:00 pm ET, Federal Reserve will issue the Beige Book of economic condition in the twelve Federal Reserve districts.

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