Euro Higher As ECB Retains Key Interest Rates
April 22 2021 - 4:59AM
RTTF2
The euro was higher against its major counterparts in the
European session on Thursday, after the European Central Bank left
its key interest rates unchanged and said that the increased bond
buying will continue to be conducted during the current
quarter.
The Governing Council maintained the main refi rate at a record
low of zero percent and the deposit rate at -0.50 percent. The
marginal lending facility rate is at 0.25 percent.
The Governing Council retained the pandemic emergency purchase
programme at EUR 1.85 trillion.
The purchases under the PEPP will continue to be conducted at a
significantly higher pace over the current quarter than during the
first months of the year.
"The Governing Council will purchase flexibly according to
market conditions and with a view to preventing a tightening of
financing conditions that is inconsistent with countering the
downward impact of the pandemic on the projected path of
inflation," the bank said.
Net asset purchases under the PEPP will be conducted until at
least the end of March 2022 and, in any case, until the Governing
Council judges that the coronavirus crisis phase is over.
Proceeds from maturing securities under PEPP will be reinvested
until at least the end of 2023.
European stocks rose amid continued optimism about earnings and
hopes that a momentum shift in vaccination drive will help curb the
spread of the Covid-19 pandemic.
The currency showed mixed trading against its major counterparts
in the Asian session. While it rose against the greenback, it held
steady against the franc and the pound. Versus the yen, it
fell.
The euro bounced off to 1.1037 against the franc, from a low of
1.1014 seen at 4:30 am ET. The euro is likely to face resistance
around the 1.13 region, if it gains again.
Data from the Federal Customs Administration showed that
Switzerland's exports grew in the first quarter.
Exports increased 4.9 percent sequentially in the first quarter,
while imports grew 1.9 percent.
The euro was up against the pound, at a 6-day high of 0.8689.
The euro-pound pair had finished yesterday's trading session at
0.8639. On the upside, 0.88 is likely seen as its next resistance
level.
Survey results from the Confederation of British Industry showed
that UK manufacturing orders grew at the fastest pace in two years
and the optimism among manufacturers rose the most since 1973.
The order book balance rose to +5 percent in three months to
April from -12 percent in January, the latest Industrial Trends
survey revealed. This was the biggest growth since April 2019.
The euro appreciated to a 2-day high of 130.38 against the yen
from Wednesday's close of 130.04. The euro is seen finding
resistance around the 133 level.
The euro remained higher against the greenback, at a 2-day high
of 1.2059. The pair had closed Wednesday's deals at 1.2034. The
currency is likely to locate resistance around the 1.22 level.
The single currency ticked up to 1.5582 against the aussie and
1.6791 against the kiwi, compared to yesterday's closing values of
1.5510 and 1.6675, respectively. Further rally may take the euro to
resistance levels of around 1.57 against the aussie and 1.72
against the kiwi.
The European currency was trading at 1.5057 per loonie, up from
yesterday's trading close of 1.5037. Immediate resistance for the
currency is seen around the 1.52 level.
Looking ahead, U.S. existing home sales for March are scheduled
for release at 10:00 am ET.
At the same time, Eurozone flash consumer sentiment index for
April is due.
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