Euro Eases As ECB's Draghi Signals On Asset Purchase Programme
April 24 2014 - 6:30AM
RTTF2
The euro came off from early highs against other major
currencies in European deals on Thursday as the European Central
Bank President Mario Draghi indicated that the worsening of
Eurozone inflation outlook may lead the bank to conduct broad-based
asset-purchase program.
A worsening of the medium-term outlook for inflation "would be
the context for a more broad-based asset purchase programme",
Draghi said in a conference in Amsterdam.
Draghi noted that though "the exchange rate is not in itself a
policy target, a rise in the exchange rate, all else being equal,
implies a tightening of monetary conditions, a downward impact on
inflation and potentially a threat to the ongoing recovery. If so,
this would call for policy action to maintain the current
accommodative stance."
Better-than-expected German Ifo survey results lifted up the
euro earlier.
The survey results from Ifo Institute for Economic Research
showed that German business confidence rose to 111.2 in April from
110.7 in March, while it was forecast to fall to 110.4.
The current conditions index, at the same time, improved less
than expected to 115.3 from 115.2 in March. The expected score was
115.6.
The euro fell back against the against the greenback and traded
around 1.3815, reversing from an early high of 1.3843. The next
possible support for the euro lies around the 1.37 mark.
After climbing to 0.8245 against the pound around 4:05 am ET,
the euro eased back to 0.8231. If the euro extends slide, it may
find support around the 0.82 zone.
Pulling away from an early high of 141.80 against the yen, the
euro slipped back and was trading around 141.44. The pair was worth
141.68 when it closed deals on Wednesday. Continuation of downtrend
may see the euro seeking support at the 140.00 area.
The euro reversed from early highs of 1.4927 against the aussie
and 1.5279 against the loonie and slipped back to 1.4902 and
1.5236, respectively. Further weakness may take the euro to support
around 1.48 against the aussie and 1.51 against the loonie.
Meanwhile, the euro was steady against the franc with pair
trading around 1.2203, after having fallen to 1.2197 earlier.
Switzerland's trade surplus increased notably in the first
quarter on strong exports of pharmaceutical products, the Federal
Customs Administration showed today.
Exports advanced 4.4 percent on a yearly basis to CHF 51.3
billion in the first quarter. Likewise, imports grew 2.2 percent to
CHF 44.4 billion. Looking ahead, the U.S. durable goods orders data
for March and weekly jobless claims for the week ended April 19 are
set for release in the New York session.
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