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Euro Lower As China Concerns Sap Sentiment

The euro fell against its most major rivals in the European session on Monday, as investors worry that fresh COVID-19 restrictions in China will lead to a slowdown in the economic growth.

Chinese authorities locked down part of the manufacturing hub of Guangzhou for five days and urged residents of the sprawling Chaoyang district to remain at home today.

Beijing reported three Covid deaths over the weekend, despite a strict zero-COVID policy.

European Central Bank chief economist Philip Lane said that the central bank is unlikely to consider a very large hike such as 75 basis points when it meets in December.

German bond yields fell, with the yield on the 10-year Bund dropping to 2.005 percent.

The euro weakened to a 10-day low of 1.0226 against the greenback and more than a 2-month low of 1.6718 against the kiwi, from its early highs of 1.0333 and 1.6803, respectively. The next possible support for the euro is seen around 0.99 against the greenback and 1.66 against the kiwi.

The euro touched 1.3738 against the loonie, setting a 5-day low. On the downside, 1.36 is likely seen as its next support level.

The euro depreciated to a 5-day low of 0.9800 against the franc and near a 3-week low of 0.8658 against the pound, down from its prior highs of 0.9854 and 0.8698, respectively. The euro may test support around 0.97 against the franc and 0.85 against the pound.

In contrast, the euro rebounded to 1.5506 against the aussie and 145.46 against the yen, off its early low of 1.5444 and a 5-day low of 144.33, respectively. The currency is likely to find resistance around 1.59 against the aussie and 150.00 against the yen.

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