Euro Slides As European Shares Subdued Ahead Of Fed Verdict

(RTTNews) - The euro weakened against other major currencies in the European session on Wednesday, as European stocks were subdued after rising in the previous session on Germany's approval for a massive spending surge.

Bond yields dipped marginally as traders await the Federal Reserve's interest-rate decision, the post-meeting statement, updated economic projections and Chair Jerome Powell's comments for greater clarity on how proposed U.S. tariffs may impact prices and activity.

Global ratings agency Fitch has lowered its global growth forecast and warned that U.S. President Donald Trump's reciprocal tariffs will push up inflation and delay Fed rate cuts.

Meanwhile, amid economic headwinds both at home and abroad, the Bank of England is widely expected to hold interest rates when it meets on Thursday.

In economic news, data from Eurostat showed that Eurozone inflation eased more than initially estimated to a three-month low in February, as sluggish economic activity impeded price pressures. The harmonized index of consumer prices rose 2.3 percent on a yearly basis in February, slower than the 2.5 percent increase in January. The February rate was revised down from 2.4 percent.

Core inflation that excludes energy, food, alcohol and tobacco, slowed marginally to 2.6 percent, in line with flash estimate, from 2.7 percent in the previous month.

On a monthly basis, the HICP gained 0.4 percent in February, which was down from the initial estimate of 0.5 percent. In the European trading, the euro fell to a 5-day low of 0.8392 against the pound and an 8-day low of 0.9542 against the Swiss franc, from yesterday's closing quotes of 0.8421 and 0.9599, respectively. If the euro extends its downtrend, it is likely to find support around 0.82 against the pound and 0.93 against the franc.

Against the yen and the U.S. dollar, the euro slid to 2-day lows of 162.20 and 1.0873 from Tuesday's closing quotes of 163.88 and 1.0945, respectively. On the downside, 155.00 against the yen and 1.03 against the greenback are seen as the next support levels for the euro.

The euro edged down to 1.5581 against the Canadian dollar, from yesterday's closing value of 1.5655. The next possible downside target for the euro is seen around the 1.51 region.

Looking ahead, U.S. MBA mortgage approvals data and U.S. EIA crude oil data are slated for release in the New York session.

At 2:00 pm ET, the Federal Open Market Committee's (FOMC's) second policy meeting is largely awaited. After its two-day meeting, which concludes today, the U.S. Federal Reserve's rate-setting committee anticipates maintaining the federal fund rate at a range of 4.25 to 4.5 percent.