Euro Lower Amid Global Growth Fears

The euro fell against its major rivals in the European session on Tuesday, amid global growth concerns led by Covid lockdowns in China and the prospects of aggressive rate hikes by the U.S. Federal Reserve.

Investors fear that strict lockdown measures would be extended to Beijing as the authorities decided to expand its Covid-19 mass testing from one district to another 10 districts.

The city of Anyang in central China and Dandong on the border with North Korea announced lockdowns driven by the spread of the omicron variant.

Indications that the Fed will tighten monetary policy aggressively at upcoming meetings sapped investor sentiment.

European Central Bank policymaker Martins Kazaks said that interest rates should be lifted soon and there is room for up to three hikes this year.

The euro fell to 1.0672 against the greenback, its weakest level since March 2020. Next immediate support for the euro is seen around the 1.05 level.

The euro was down against the franc and the yen, at a 1-week low of 1.0227 and near a 2-week low of 136.04, respectively. The currency is likely to face support around 1.01 against the franc and 133.00 against the yen.

The euro weakened to 4-day lows of 1.4812 against the aussie and 1.6092 against the kiwi, down from its previous highs of 1.4944 and 1.6210, respectively. The euro is seen finding support around 1.45 against the aussie and 1.58 against the kiwi.

The euro reached as low as 1.3601 against the loonie, setting a 5-day low. The euro may locate support around the 1.34 level.

In contrast, the euro recovered to 0.8420 against the pound, from an early 4-day low of 0.8393. If the currency rises further, 0.86 is likely seen as its next resistance level.

Looking ahead, U.S. consumer confidence index for April, new home sales for March, FHFA's house price index and S&P/Case-Shiller home price index for February will be out in the New York session.