RTTNews - The euro saw further weakness against the dollar and yen on Wednesday in New York on increased risk aversion amid concerns the global economy may not recover as quickly as hoped. The European currency continued to rebound against the sterling.

Wednesday, the Eurostat confirmed a 2.5% quarter-on-quarter contraction in Eurozone gross domestic product in the first quarter. At the same time, the statistical agency downwardly revised the annual decline in GDP to 4.9% from initially reported fall of 4.8%.

Meanwhile, German industrial production rose more than expected in May, data released by the Federal Ministry of Economics and Technology showed Wednesday.

The euro touched its lowest level in nearly two weeks against the dollar. The single currency slipped to a support level at 1.3860 in the early morning and then tested that mark in mid-day trading.

In the U.S., Alcoa is scheduled to announce financial results for the second quarter after the market closes today, kicking off the start of the second quarter reporting season.

The European currency dropped to a 7 1/2 week low against the resurgent Japanese yen, hitting 128.61. The euro has been weakening against its Japanese rival throughout July.

In Japan, core machinery orders declined 3.0% in May, following a 5.4% drop in April. Economists were looking for a gain of 2%. Machinery orders were down 38.3% from a year earlier.

Meanwhile, the euro extended a monthly high against the sterling, reaching 0.8670. The common currency has been trending to the upside since mid-June when it moved off of a multi-month low of 0.8399.

In economic news from the Eurozone, factory output rose 3.7% month-on-month in May after falling a revised 2.6% in April. The increase exceeded the forecast for a 0.5% rise.

On an annual basis, industrial production fell 17.9%, slower than a 20% decline predicted by economists and follows a revised decrease of 22.3% in April, the ministry said.

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