RTTNews - The euro was generally weaker against other majors on Wednesday in New York amid reports the Russian Central Bank may cut its U.S. treasury investments in favor of International Monetary Fund bonds. The common currency extended a multi-month low against the sterling and also slipped against the dollar.
Encouraging manufacturing data in the UK for a second straight month helped the pound continue rise against its European rival, amid hopes confidence in the British economy may be stabilizing. Meanwhile, the euro has struggled to find direction with the U.S. dollar as investors await the Federal Reserve's next move.
According to comments from first deputy chairman Alexei Ulyukayev, a little more than 30% of the country's $400 billion in international reserves are held in Treasuries. Last month, Finance Minister Alexei Kudrin said Russia was planning on buying $10 billion in IMF bonds.
Also on Wednesday, official data showed that the German annual inflation rate reached the lowest level since 1987 on easing energy and food prices. French industrial production dropped faster than expected in April due to widespread contraction in all industrial sub-sectors, especially in the manufacture of petroleum products.
The euro was slightly lower against the dollar, hovering near the 1.4000 mark. The European currency has been choppy since climbing away from a near-term low of 1.3804 earlier in the week. Last week, the euro hit a multi-month high of 1.4338.
A Commerce Department report showed that the trade deficit widened to $29.2 billion in April from a revised $28.5 billion in March. Economists had expected the deficit to widen to $29.0 billion from the $27.6 billion originally reported for the previous month.
The European currency fell again versus the British pound and extended a six-month low to 0.8548. The euro has been trending sharply lower through the week.
U.K.'s Office for National Statistics said manufacturing output rose 0.2% in April from the previous month, slightly more than the expected 0.1% increase. The statistical office revised the initial decline estimated for March to a 0.2% increase, which turned out to be the first growth in manufacturing output since February 2008.
The euro was little-changed against the yen after giving back modest early gains. The pair moved near 137.40 in the early afternoon.
Japan's Cabinet Office said core machinery orders were down 5.4% month-on-month to 688.8 billion yen in April, the lowest in 22 years. That was far worse than analyst expectations for a 0.4% monthly increase following the 1.3% decline in March. On an annual basis, core machinery orders plummeted 32.8%.
On the economic front in the Eurozone, Germany's annual inflation remained flat in May, following April's 0.7%, a final report from the Federal Statistical Office showed. A year ago, the rate was 3%.
In a separate report, the German statistical office said there were 7,712 enterprise insolvencies and 24,106 consumer insolvencies in the first quarter.
Data released by the French statistical office INSEE showed that industrial production fell 1.4% month-on-month in April after falling a revised 1.7% in March. Economists had forecast the pace of decline in industrial output to slow to 0.2% in April.
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