Euro Falls Amid Risk-Off Mood

(RTTNews) - The euro weakened against other major currencies in the European session on Wednesday, as European shares drifted lower with renewed Middle East tensions and France's deepening fiscal crisis keeping investors on edge.

Brent crude futures traded above $101 a barrel following more attacks on vessels in the Persian Gulf region.

German, French and Italian bond yields jumped as investors refocused on fiscal worries.

Yields rebounded on fears Iran is stepping up attacks on tankers in the Strait of Hormuz.

In a statement on the social media platform X, Yemen's Houthi group claimed that it carried out a series of drone and ballistic missile attacks targeting airports and military installations in Saudi Arabia.

Also, the Houthis denied being pushed back by government forces after Yemen's military said it had removed the pro-Iran group from areas around the Bab al-Mandab strait - a Red Sea chokepoint - and the port city of Mocha.

In economic releases, German industrial output expanded 2.0 percent on a monthly basis in August, in contrast to the 1.2 percent decrease in July, data published by Destatis revealed.

Production was expected to grow 0.5 percent. On a yearly basis, industrial production grew 2.3 percent, reversing July's 1.8 percent fall.

Elsewhere, U.K. house prices remained unchanged in September after falling for two straight months amid higher interest rate expectations, monthly data published by Lloyds Banking Group showed.

House prices were flat in September on a monthly basis, following a 0.3 percent fall in August and a 0.1 percent drop in July.

In the European trading today, the euro fell to a 4-month low of 0.8448 against the pound, from an early high of 0.8484. On the downside, 0.83 is seen as the next support level for the euro.

Against the U.S. dollar, the yen and the Swiss franc, the euro dropped to 2-day lows of 1.1179, 176.55 and 0.9311 from early highs of 1.1255, 178.31 and 0.9368, respectively. If the euro extends its downtrend, it is likely to find support around 1.10 against the greenback, 176.00 against the yen and 0.91 against the franc.

Against Australia, the New Zealand and the Canadian dollars, the euro slipped to nearly a 1-year low of 1.6048, a 5-day low of 1.9941 and a 5-month low of 1.5907 from early highs of 1.6124, 2.0053 and 1.5994, respectively. The next possible downside targets for the euro is seen around 1.59 against the aussie, 1.98 against the kiwi and 1.56 against the loonie.

Looking ahead, U.S. EIA crude oil data and U.S. consumer inflation expectations for September are slated for release in the New York session.