Euro Weakens In Cautious Trade

The euro dropped against its major counterparts in the European session on Thursday, as a rapid spread of the Omicron variant of Covid-19 clouded global economic outlook.

Data from Johns Hopkins University showed that global infections exceeded 284 million, while the deaths surpassed 5.44 million.

France and the U.K. reported a record rise in daily infections on Wednesday. The seven-day average of new cases rose above 277,000 in the U.S.

European Central Bank governing council member Ignazio Visco said that inflation forecasts of below 2 percent in 2023-2024 could be exposed to the downside and upside risks.

Inflation in the Eurozone could remain above the central bank's goal of 2 percent after 2022, ECB policymaker Klaas Knot said.

Trading volumes were thin as the year-end holidays approached.

The euro declined to 1.1300 against the greenback, 1.4471 against the loonie and 130.12 against the yen, after rising to 1.1360 and 1.4522 and 1-1/2-month high of 130.59, respectively in prior deals. The next possible support for the euro is seen around 1.10 against the greenback, 1.42 against the loonie and 127.5 against the yen.

The euro dipped to a fresh 5-week low of 0.8392 against the pound, from a high of 0.8417 seen at 6:45 pm ET. Next key support for the currency is seen around the 0.82 region.

The European currency touched a 6-day low of 1.6553 against the kiwi and near a 5-week low of 1.5569 against the aussie, down from its early highs of 1.6619 and 1.5661, respectively. The euro may locate support around 1.62 against the kiwi and 1.53 against the aussie.

The euro slipped to 1.0366 against the franc, after a 2-day rise to 1.0384 at 9:15 pm ET. On the downside, 1.01 is possibly seen as its next support level.

Looking ahead, U.S. weekly jobless claims for the week ended December 24 will be out in the New York session.