Euro Weakens Against Majors
March 30 2017 - 2:33AM
RTTF2
The euro declined against its major counterparts in the early
European session on Thursday, as Eurozone bond yields declined
after a slowdown in consumer price inflation in Spain and on
continued expectations that the European Central Bank would stick
to accommodative monetary policy to boost inflation.
Flash data from the statistical office INE showed that Spain's
inflation slowed more than forecast in March.
Consumer price inflation eased to a 3-month low of 2.3 percent
in March from 3 percent in February. Economists had forecast the
rate to fall to 2.6 percent.
The European Central bank is unlikely to change monetary policy
and QE measures soon and the markets had misinterpreted recent
tweaks that raised expectations of the winding of QE program and a
rate hike, according to a report from Reuters on Wednesday.
The ECB officials sounded caution in changing their monetary
policy before June and the policy language of the March 9 press
conference was over-interpreted, the report showed.
Eurozone government bond yields fell broadly, with benchmark
yield on 10-year bunds down by 0.34 percent. Yields move inversely
to bond prices.
Investors await the Eurozone flash consumer price inflation for
March, scheduled to be released tomorrow, for more clues about the
outlook of the economy.
Survey results from the European Commission showed that Eurozone
economic confidence weakened unexpectedly in March.
The economic sentiment index fell slightly to 107.9 in March
from 108.0 in February. The score was forecast to rise to
108.3.
The euro showed mixed performance in the Asian session. While
the euro held steady against the franc and the pound, it dropped
against the greenback. Against the yen, it was modestly higher.
Reversing from an early high of 1.0729 against the Swiss franc,
the euro declined to a 2-day low of 1.0694. Continuation of the
euro's downtrend may see it challenging support around the 1.04
region.
Data from the KOF Institute showed that Swiss economy is set to
grow at above-average rates in the near future.
The KOF Economic Barometer climbed to 107.6 from 106.9 in
February, revised down from 107.2. In contrast, economists had
expected a decline to 105.8.
The euro retreated to 1.0731 against the greenback, from a high
of 1.0770 hit at 5:15 pm ET. The euro is poised to find support
around the 1.05 area.
The euro, having advanced to 119.85 against the yen at 9:30 pm
ET, reversed direction and edged down to 119.16. If the euro-yen
pair extends fall, 117.00 is possibly seen as its next support
level.
The 19-nation currency weakened to 0.8626 against the pound,
compared to Wednesday's closing value of 0.8656. The euro is seen
finding support around the 0.84 level.
The euro dropped to 9-day lows of 1.4310 against the loonie and
1.3999 against the aussie, off its early highs of 1.4356 and
1.4061,respectively. The next possible support level for the euro
is seen around 1.41 against the loonie and 1.38 against the
aussie.
The 19-nation currency eased back to 1.5291 against the kiwi,
from a high of 1.5345 hit at 3:30 am ET. The euro had already set
an 8-day low of 1.5277 in the early Asian session. The euro may
possibly challenge support around the 1.51 mark.
At 8:00 am ET, German preliminary consumer price index for March
is due.
In the New York session, U.S. fourth quarter GDP for March and
weekly jobless claims for the week ended March 25, as well as
Canada industrial product price index for February are set for
release.
Chicago Fed President Loretta Mester speaks on "Payment System
Improvement" before the closed Tenth Annual Risk Conference
co-hosted by the Federal Reserve Bank of Chicago and the DePaul
University Center for Financial Services at 9:45 am ET.
Dallas Fed President Robert Kaplan speaks at the US Chamber of
Commerce in Washington DC at 11:00 am ET.
San Francisco Fed President John Williams participates in a
panel before the Strong, Prosperous and Resilient Communities
Challenge (SPARCC) event at 11:15 am ET.
New York Fed President William Dudley speaks before the
Financial Literacy Day and Laboratory Dedication hosted by the
University of South Florida at 4:30 pm ET.
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