Euro Weakens As German Industrial Output Falls Unexpectedly

The euro slipped against its major rivals in early European trading on Wednesday, as Germany's industrial production declined unexpectedly in August and traders await the minutes of the European Central Bank's September meeting for further insight regarding the expansion of quantitative easing programme.

Data from Destatis showed that industrial production declined 1.2 percent in August from the prior month, offsetting the 1.2 percent rise in July. Economists had forecast the growth rate to ease to 0.2 percent. July's growth was revised up from 0.7 percent.

The data added to evidence that slowing growth in China and weakness in other developing markets are hurting German industry.

The European Central Bank releases account of the monetary policy meeting in September on Thursday. Investors seek more clues about any discussion of additional stimulus in the minutes, given slowing global growth and low inflation.

In its latest World Economic Outlook released on Tuesday, the International Monetary Fund lowered the global growth forecast for this year to 3.1 percent from 3.3 percent, saying global growth remains 'moderate and uneven' amid the modest pick-up in advanced economies and the slowdown in emerging market.

Euro area growth forecast for this year was retained at 1.5 percent, while the outlook for next year was cut to 1.6 percent from 1.5 percent.

Market participants cautiously await the start of earnings season, with aluminum giant Alcoa due to announce its third-quarter results on Thursday.

The currency was modestly lower in the previous session.

In early European deals, the euro slipped to a 6-day low of 1.0878 against the Swiss franc, compared to 1.0895 hit late New York Tuesday. The next possible support for the euro-franc pair may be located around the 1.075 level.

The euro was trading lower at 0.7381 against the pound, 1.1257 against the greenback and 135.11 against the yen, off its early high of 0.7404, 2-day highs of 1.1284 and 135.63, respectively. If the euro extends decline, it is likely to find support around 1.11 against the greenback, 0.725 against the pound and 134.00 against the yen.

The euro reached as low as 1.4608 against the loonie, from its early high of 1.4710. Continuation of the euro's downtrend may drive the euro down to a support around the 1.45 area.

The 19-nation currency weakened to 1.6968 against the kiwi, its lowest since August 21, while touching nearly a 6-week low of 1.5597 against the aussie. On the downside, the euro may locate support around 1.68 against the kiwi and 1.54 against the aussie.

Looking ahead, U.K. industrial and manufacturing output for August will be published in the European session.

Canada building permits for August, Energy Information Administration's weekly crude inventory data for the week October 2 and U.S. consumer credit for August are to be released in the New York session.