Euro Drops As ECB Tapering Hopes Wane
August 16 2017 - 2:43AM
RTTF2
The euro declined against its major opponents in the European
session on Wednesday, after a media report showed that the European
Central Bank President Mario Draghi is unlikely to hint at any
shift in its monetary policy stance at the Jackson Hole symposium,
due next week.
The ECB chief would not take the opportunity to deliver fresh
policy signals and is set to hold off on the discussion to changes
in monetary policy until the autumn, Reuters reported.
Draghi's speech will focus on fostering a dynamic global
economy, which is the main theme of the symposium.
The report soothed worries that the ECB is nearing to start
plans on withdrawal of its massive stimulus program.
Flash estimate from Eurostat showed that the euro area economy
expanded as initially estimated in the second quarter.
Gross domestic product grew 0.6 percent quarter-on-quarter,
slightly faster than the 0.5 percent increase seen in the first
quarter.
On a yearly basis, GDP growth was revised up slightly to 2.2
percent from 2.1 percent. The economy had expanded 1.9 percent in
the first quarter.
The currency was modestly higher against its major rivals in the
Asian session, with the exception of the pound.
The euro edged down to 1.1691 against the greenback and 129.61
against the Japanese yen, from its early high of 1.1758 and an
8-day high of 130.40,respectively. If the euro weakens further,
1.15 and 128.00 are possibly seen as its next support levels
against the greenback and the yen, respectively.
The single currency reversed from an early near 1-year high of
0.9143 against the pound, falling to 0.9082. On the downside, 0.88
is likely seen as the next support level for the euro.
Data from the Office for National Statistics showed that the UK
unemployment rate declined in the second quarter.
The ILO unemployment rate fell to 4.4 percent in the second
quarter from 4.9 percent a year ago. This was the lowest since
1975.
Reversing from an early 14-month high of 1.6246 versus the kiwi,
the euro weakened to 1.6137. The euro is seen finding support
around the 1.60 area.
The euro hit 6-day lows of 1.4872 against the aussie and 1.4888
against the loonie, off its previous highs of 1.5014 and 1.4986,
respectively. Continuation of the euro's downtrend may see it
challenging support around 1.47 against the aussie and 1.46 against
the loonie.
The 19-nation currency eased back to 1.1405 against the franc,
from a high of 1.1443 hit at 3:30 am ET. The next possible support
for the euro-franc pair is seen around the 1.13 area.
Looking ahead, U.S. housing starts and building permits, both
for July, and U.S. crude oil inventories data are slated for
release in the New York session.
At 2:00 pm ET, U.S. Federal Reserve is scheduled to publish
minutes of its July monetary policy meeting.
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