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Euro Drops As EU Forecasts Slowdown In Eurozone Growth Over Next 2 Years

The euro declined against its major counterparts in the European session on Thursday, after the European Commission warned that weakening global economic activity, growing trade tensions, slower employment growth and increased uncertainty over investment could slowdown economic growth in the euro area in the coming two years.

In its Autumn forecast, the EC said that economic growth in the euro area will decelerate over the next two years, in line with a further slowing momentum of foreign trade.

In the near term, economic growth is expected to continue at about the same pace as in the first half of the year, resulting in euro area growth of 2.1 percent in 2018, unchanged from previous projection.

Real GDP was forecast to grow 1.9 percent in 2019 and 1.7 percent in 2020. The outlook for 2019 was trimmed from 2 percent.

Data from Destatis showed that Germany's exports and imports declined unexpectedly in September.

Exports dropped 0.8 percent month-on-month, reversing a 0.1 percent rise in August. At the same time, imports slid 0.4 percent following August's 2.4 percent decrease.

The currency traded mixed against its major counterparts in the Asian session. While it held steady against the yen, the greenback and the franc, it fell against the greenback.

The euro edged down to 1.1445 against the franc, from a high of 1.1462 hit at 3:30 am ET. The next possible support for the euro is seen around the 1.13 level.

Data from the State Secretariat for Economic Affairs showed that Switzerland's unemployment rate remained stable in October.

The jobless rate came in at seasonally adjusted 2.5 percent in October, the same rate as seen in September and in line with expectations.

The single currency slipped to 0.8692 against the pound, its lowest since April 23. The euro is likely to find support around the 0.85 area.

The euro fell back to 1.1412 against the greenback, down from a high of 1.1445 seen at 3:30 am ET. On the downside, 1.13 is possibly seen as the next support level for the euro.

The common currency pared gains to 129.74 against the yen, from a high of 130.13 touched at 3:30 am ET. If the euro falls further, it may challenge support around the 128.00 level.

Data from the Bank of Japan showed that Japan overall bank lending rose 2.2 percent on year in October, coming in at 529.471 trillion yen.

That follows the 2.3 percent increase in September.

The euro weakened to a 3-day low of 1.4939 against the loonie, following a rise to 1.5003 at 7:45 pm ET. The euro is seen finding support around the 1.47 region.

The euro dropped to 1.5666 against the aussie, a level unseen since August 21. The euro is poised to find support around the 1.54 mark.

On the flip side, the euro held steady against the kiwi, after having dropped to 1.6819 at 2:15 am ET. The pair was valued at 1.6839 when it ended deals on Wednesday.

Looking ahead, at 8:15 am ET, Canada housing starts for October are set for release.

In the New York session, Canada new housing price index for September and U.S. weekly jobless claims for the week ended November 3 are scheduled for release.

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