Euro Weakens Ahead Of ECB Decision
April 25 2018 - 4:42AM
RTTF2
The euro dropped against its most major opponents in the
European session on Wednesday, as investors look forward to the
European Central Bank's rate setting meeting on Thursday, with
policymakers widely expected to signal no change in policy.
Economists expect the bank to keep the main refi rate at a
record low of zero percent and the deposit rate at -0.40 percent.
The marginal lending facility rate is expected to be retained at
0.25 percent.
The ECB is also expected to refrain from giving any hints about
the future of QE program, which ends in September.
Investors fretted over higher bond yields, which was buoyed by
expectations of more Fed rate hikes this year.
The U.S. 10-year treasury yield climbed above 3 percent on
expectations that accelerating inflation could put pressure on the
Fed for more Fed rate hikes this year.
Figures from Destatis showed that Germany's construction orders
grew notably in February.
New orders in the main construction industry climbed 9.9 percent
month-over-month in February. Orders surged 13.0 percent in
February from a year earlier.
The currency showed mixed trading against its major rivals in
the Asian session. While it rose against the franc and the yen, it
held steady against the franc. Against the greenback, it
declined.
The euro edged down to 132.91 against the yen, from a high of
133.34 hit at 2:45 am ET. The euro is poised to challenge support
around the 130.00 mark.
Data from the Ministry of Economy, Trade and Industry showed
that Japan's all industry activity rebounded at a
slower-than-expected pace in February.
The all industry activity index rose 0.4 percent
month-over-month in February, reversing a 0.1 percent drop in
January. That was just below the expected increase of 0.5
percent.
The 19-nation currency declined to 1.2175 against the greenback,
its weakest since March 1. The euro is seen challenging support
around the 1.20 area.
The euro that closed Tuesday's trading at 0.8750 against the
pound dropped to a 5-day low of 0.8736. If the euro continues its
decline, 0.86 is possibly seen as its next support level.
On the flip side, the euro hovered around a 5-day high of 1.1997
against the franc, compared to 1.1973 hit late New York Tuesday.
Next key resistance for the euro is likely seen around the 1.22
level.
Survey data from the investment bank Credit Suisse and the CFA
Society Switzerland showed that Switzerland's investor confidence
deteriorated further in April.
The Credit Suisse CFA Society Switzerland Indicator that
reflects expectations of financial analysts for the economy in the
coming six months, fell to 7.2 points from 16.7 in March. This was
the lowest since October 2016.
Looking ahead, at 4:15 pm ET, the Bank of Canada Governor
Stephen Poloz testifies along with Senior Deputy Governor Carolyn
Wilkins before the Standing Senate Committee on Banking, Trade and
Commerce, in Ottawa.
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