The euro weakened against its major counterparts in the European session on Wednesday, after a media report showed that Italian government is considering a plan for a new bond buying program from the European Central Bank to avert a ratings downgrade.

Italian government may reach out to the ECB to begin a new quantitative easing programme to ward off speculative attacks on its financial markets, Italian daily La Stampa reported.

Italian bond yields fell, with the yield on 2-year note falling 0.04 points to 1.23 percent. Yields move inversely to bond prices.

Investors look forward to see progress in talks between the U.S. and Canada to salvage the North American trade pact.

Meanwhile, Italian Finance Minister Giovanni Tria said that Italy isn't planning to breach the European Union's budget deficit limit.

Survey from the market research group GfK showed that Germany's consumer confidence is set to drop marginally in September.

The forward-looking consumer sentiment index dropped to 10.5 in September from 10.6 in August. The score was forecast to remain unchanged at 10.6.

The currency has been trading in a negative territory against its major rivals in the Asian session.

The euro declined to a 2-day low of 1.1652 against the greenback, from a high of 1.1698 hit at 10:15 pm ET. Next key support for the euro is seen around the 1.15 mark.

The common currency slipped to 2-day lows of 129.58 against the yen and 0.9042 against the pound, coming off from its early highs of 130.21 and 0.9092, respectively. On the downside, 128.00 and 0.89 are likely seen as the next support levels for the euro against the yen and the pound, respectively.

Having advanced to 1.1424 against the franc at 10:15 pm ET, the euro reversed direction and hit a 5-day low of 1.1388. The euro is likely to challenge support around the 1.12 level.

Survey data from the investment bank Credit Suisse and the CFA Society Switzerland showed that optimism among Swiss financial analysts deteriorated sharply in August.

The investor confidence index declined by 10.3 points to -14.3 in August. The indicator remained negative for the second straight month.

The single currency declined to a 2-day low of 1.7384 against the kiwi and a 6-day low of 1.5079 against the loonie, reversing from its early highs of 1.7443 and 1.5126, respectively. The euro is poised to find support around 1.72 against the kiwi and 1.49 against the loonie.

On the flip side, the euro held steady against the aussie, after rising to near a 4-month high of 1.5991 at 2:30 am ET. At yesterday's close, the pair was worth 1.5935.

Looking ahead, U.S. GDP data for the second quarter and pending home sales for July are scheduled for release in the New York session.

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