Investing.com - The euro came off multi-year low against the other major currencies on Wednesday, following comments by senior European Central Bank policymaker Ewald Nowotny, but the single currency remained under pressure amid sustained concerns over the escalating crisis in the euro zone.
During European late morning trade, the euro pulled back from a two-year low against the U.S. dollar, with EUR/USD up 0.52% to 1.2124.
ECB Governing Council member Nowotny said that there were some arguments in favor of giving the euro zone’s bailout fund, the European Stability Mechanism, a banking license, which would increase its firepower to fight the debt crisis in the euro zone.
But investors remained cautious as the yield on Spanish 10-year government bonds remained above the 7.50% level, beyond the 7% threshold widely considered unsustainable in the long run, fuelling concerns that a full-scale sovereign bailout is inevitable.
Meanwhile, weak economic data out of German and the U.K. indicated that Europe’s largest economies are being affected by the debt crisis in the region.
The German research institute Ifo said its Business Climate Index fell to 103.3 in July, the lowest level since June 2010, from a reading of 105.2 in June.
In the U.K., official data showed that the U.K. economy contracted the most since the first quarter of 2009 in the three months to June.
The Office for National Statistics said gross domestic product contracted by 0.7% in the second quarter, far more than the 0.2% contraction economists had forecast, extending Britain's recession into a third quarter.
Following the data, the euro pulled away from a three-and-a-half year low against the pound, with EUR/GBP rising 0.64% to 0.7824.
The euro came off its lowest level in 12 years against the yen, with EUR/JPY up 0.49% to 94.74.
Earlier Wednesday, the Bank of Japan said it would not hesitate to ease monetary policy further if the yen's appreciation severely threatens Japan's economic recovery.
The euro was steady against the Swiss franc, with EUR/CHF inching up 0.01% to 1.2010.
The shared currency moved away from near record lows against the Australian, Canadian and New Zealand dollars, with EUR/AUD inching up 0.06% to 1.1806, EUR/CAD adding 0.17% to trade at 1.2349 and EUR/NZD rising 0.40% to hit 1.5433.
The Australian dollar was little changed earlier, following official data showing that domestic consumer price inflation rose 0.5% in the second quarter, slightly below expectations for a 0.6% increase, after a 0.1% rise the previous quarter.
Later in the day, the U.S. was to publish official data on new home sales, as well as a report on crude oil stockpiles.
During European late morning trade, the euro pulled back from a two-year low against the U.S. dollar, with EUR/USD up 0.52% to 1.2124.
ECB Governing Council member Nowotny said that there were some arguments in favor of giving the euro zone’s bailout fund, the European Stability Mechanism, a banking license, which would increase its firepower to fight the debt crisis in the euro zone.
But investors remained cautious as the yield on Spanish 10-year government bonds remained above the 7.50% level, beyond the 7% threshold widely considered unsustainable in the long run, fuelling concerns that a full-scale sovereign bailout is inevitable.
Meanwhile, weak economic data out of German and the U.K. indicated that Europe’s largest economies are being affected by the debt crisis in the region.
The German research institute Ifo said its Business Climate Index fell to 103.3 in July, the lowest level since June 2010, from a reading of 105.2 in June.
In the U.K., official data showed that the U.K. economy contracted the most since the first quarter of 2009 in the three months to June.
The Office for National Statistics said gross domestic product contracted by 0.7% in the second quarter, far more than the 0.2% contraction economists had forecast, extending Britain's recession into a third quarter.
Following the data, the euro pulled away from a three-and-a-half year low against the pound, with EUR/GBP rising 0.64% to 0.7824.
The euro came off its lowest level in 12 years against the yen, with EUR/JPY up 0.49% to 94.74.
Earlier Wednesday, the Bank of Japan said it would not hesitate to ease monetary policy further if the yen's appreciation severely threatens Japan's economic recovery.
The euro was steady against the Swiss franc, with EUR/CHF inching up 0.01% to 1.2010.
The shared currency moved away from near record lows against the Australian, Canadian and New Zealand dollars, with EUR/AUD inching up 0.06% to 1.1806, EUR/CAD adding 0.17% to trade at 1.2349 and EUR/NZD rising 0.40% to hit 1.5433.
The Australian dollar was little changed earlier, following official data showing that domestic consumer price inflation rose 0.5% in the second quarter, slightly below expectations for a 0.6% increase, after a 0.1% rise the previous quarter.
Later in the day, the U.S. was to publish official data on new home sales, as well as a report on crude oil stockpiles.