The euro came under pressure in European deals on Wednesday, as risk sentiment soured amid relentless slide in oil after the Saudi oil minister dashed hopes for production cut to curb supply glut.
Oil prices extended losses after declining as much as 5 percent yesterday, as both Iran and Saudi Arabia ruled out a deal by major producers to cut oil output.
Investors continued to fret about the uncertainty on the possible outcome of the historic EU referendum vote and its possible contagion effects in rest of the EU.
German bond yields also fell, with the benchmark 10-year yield falling 0.15 percent, while that of 2-year equivalents were lower by 0.53 percent.
The gradual economic recovery in the euro area is set to continue, but it will be too dangerous for the central bank to ignore the long-terms risks of more stimulus, European Central Bank Governing Council member Jens Weidmann said.
"The euro area's gradual economic recovery is likely to continue in the rest of this year and in 2017," Weidmann, who heads the German Bundesbank, said at the bank's annual press conference.
In economic news, survey results from the statistical office Insee showed that French consumer confidence weakened to a 6-month low in February largely due to heightened concerns about unemployment and standard of living.
The consumer confidence index fell to 95 in February from 97 in January. This was the lowest reading since August, when the score stood at 94.
The currency showed mixed performance in Asian deals. While the euro held steady against the greenback and the franc, it declined against the yen. Against the pound, it was modestly higher.
In European trading, the euro slipped to 1.0976 against the greenback, a level not seen since February 3. The euro is likely to challenge support around the 1.08 zone.
The single currency weakened to 122.72 against the Japanese yen for the first time since April 2013. Continuation of the euro-yen pair's downtrend may lead it to a support around the 120.00 region.
The 19-nation currency declined to a 6-week low of 1.0894 against the Swiss franc, after having advanced to 1.0943 at 3:00 am ET. The euro-franc pair is seen finding support around the 1.075 mark.
Survey data from the UBS investment bank showed that a measure of Swiss consumption climbed further at the start of the year, mainly led by improved consumer sentiment amid low oil prices and a marked increase in car registration.
The UBS Consumption Indicator rose to 1.66 points from 1.61 in December, revised from 1.62 reported earlier. The index thus extended its upward trend into the new year.
Reversing from an early high of 1.5231 against the loonie, the euro edged down to 1.5145. On the downside, 1.50 is possibly seen as the next support level for the euro-loonie pair.
On the flip side, the euro strengthened to nearly a 2-week high of 0.7895 against the pound, compared to 0.7859 hit late New York Tuesday. The next possible resistance for the euro is seen around the 0.80 region.
Data from British Bankers' Association showed that U.K. mortgage approvals increased to the highest level in nearly two years in January.
The number of mortgages approved for house purchases increased to 47,509 in January from 43,660 in December. This was the highest since February 2014 and well above the expected level of 45,000.
Meanwhile, the safe-haven dollar rose on risk aversion.
The greenback appreciated to a 7-year high of 1.3909 against the pound, reversing from a low of 1.4027 hit at 5:00 pm ET. The greenback is poised to challenge resistance around the 1.37 mark.
The greenback advanced to 0.9953 against the Swiss franc and held steady thereafter. If the greenback extends rise, 1.02 is possibly seen as its next resistance level.
Although the greenback appreciated to 112.26 against the yen at 2:30 am ET, it fell back in a short while. The greenback is heading to violate its early nearly 2-week low of 111.63.
Looking ahead, U.S. new home sales data for January, Markit's flash service PMI report for February and U.S. crude oil inventories data are set to be announced in the New York session.
German Bundesbank Chief Jens Weidmann holds a news conference in Frankfurt at 8:00 am ET. At the same time, Federal Reserve Bank of Richmond President Jeffrey Lacker speak on "Can Monetary Policy Affect Economic Growth?" before the "Leaders + Legends" lecture series sponsored by the Johns Hopkins Carey Business School, in Baltimore, U.S.
At 12:50 pm ET, Bank of Canada Deputy Governor Lawrence Schembri is expected to speak at the Guelph Chamber of Commerce, in Ontario.
Subsequently, at 1:10 pm ET, Bank of England Deputy Governor Jon Cunliffe will deliver a speech at London South Bank University.
Five minutes later, Dallas Federal Reserve Bank President Robert Kaplan is scheduled to speak at an engagement where he will likely comment on the outlook for the U.S. economy and monetary policy, in Dallas.
The material has been provided by InstaForex Company - www.instaforex.com