Euro Slides Ahead Of ECB Rate Decision
March 05 2015 - 3:12AM
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The euro weakened against the other major currencies in the late
Asian session on Thursday, as traders waited for European Central
Bank monetary policy announcement for details about the
quantitative-easing program measure announced in January.
At a European Central Bank meeting due later in the day,
president Mario Draghi will unveil the details of its 1.1 trillion
euro ($1.23 trillion) bond-buying quantitative easing program, as
part of a drive to get inflation back toward its target of just
below 2 percent. The ECB will also release new economic forecasts,
with many expecting that the growth forecasts would likely be
revised upwards after factoring in a cheaper euro and falling
energy prices.
Traders also look forward to Friday's U.S. jobs data for further
confirmation that the world's largest economy is recovering enough
to justify a rate hike. In prepared remarks to the Senate Banking
Committee last week, Federal Reserve Chair Janet Yellen said that
it was "unlikely" that economic conditions would warrant an
interest rate increase for "at least the next couple of
meetings".
Meanwhile, most of the Asian stocks traded lower as China, the
world's second-largest economy, lowered its economic growth
forecast for 2015 to about 7 percent. Investors were also trading
cautious ahead of ECB meeting due later.
In the late Asian trading today, the euro fell to 1.1025 against
the U.S. dollar for the first time September 2003. At yesterday's
close, the euro was trading at 1.1075 against the greenback. The
euro may test support near the 1.09 region.
Against the Canadian dollar, the euro slipped to 1.3717 for the
first time since September 2013. The pair was trading at 1.3763 at
yesterday's close. On the downside, 1.32 is seen as the next
support level for the euro.
Against the Australian dollar and the yen, the euro fell to more
than a 5-week low of 1.4112 and nearly a 5-week low of 132.14 from
yesterday's closing quotes of 1.4168 and 132.52, respectively. The
euro is likely to find support around 1.39 against the aussie and
130.09 against the yen.
The euro edged down to 0.7239 against the pound and 1.0651
against the Swiss franc, from yesterday's closing quotes of 0.7256
and 1.0667, respectively. If the euro extends its downtrend, it is
likely to find support around 0.69 against the pound and 0.96
against the Swiss franc.
Looking ahead, Markit's Germany construction PMI and Eurozone
retail PMI - both for February are set to be published in the
European session.
The Bank of England will announce its interest rate decision at
7:00 am ET. Economists expect the bank to retain interest rates
unchanged at 0.50 percent and asset purchase target at GBP 375
billion.
The European Central Bank will announce its interest rate
decision at 7:45 am ET. Economists expect the bank to retain
interest rates unchanged at 0.05 percent.
Following the announcement, central bank President Mario Draghi
will hold the customary post-meeting press conference in Cyprus at
8:30 am ET.
In the New York session, U.S. weekly jobless claims for the week
ended February 28, factory orders for January and Canada Ivey's PMI
for February are slated for release.
At 10:00 am ET, U.S. Federal Reserve Bank of San Francisco
President John Williams will deliver a speech about the economic
outlook at the Chartered Financial Analysts Society Hawaii 10th
Annual Economic Forecast Dinner, in Honolulu.
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