Euro, Pound Appreciate On China Stimulus Pledge
March 16 2022 - 3:49AM
RTTF2
The euro and the pound firmed against their major counterparts
in the European session on Wednesday, as European stocks rose on
optimism about more economic stimulus measures in China to support
the economy.
China's Vice Premier Liu He said that Beijing would roll out
policies favorable for markets and cautiously unveil policies
having a contractionary effect.
Liu He added that monetary policy should take initiatives to
support growth and pledged to keep capital markets stable.
The Vice Premier assured that the Chinese government would take
forceful measures to prevent risks among property developers.
Investors await the Federal Reserve's interest rate decision due
later today, which is widely anticipated to deliver a 25 basis
point rate hike amid high inflation.
Comments from Ukrainian President Volodymyr Zelenskiy that peace
talks appeared to be more realistic lifted sentiment.
The euro edged up to 1.1015 against the greenback and 0.8429
against the pound, off its early lows of 1.0948 and 0.8389,
respectively. Next key resistance for the euro is likely seen
around 1.12 against the greenback and 0.86 against the pound.
Recovering from its early lows of 1.0299 against the franc and
129.50 against the yen, the euro climbed to more than a 2-week high
of 1.0352 and a 3-week high of 130.33, respectively. The euro may
find resistance around 1.06 against the franc and 132.00 against
the yen, if it rallies again.
In contrast, the euro fell against the commodity currencies,
touching 2-day lows of 1.3965 against the loonie and 1.5170 against
the aussie. The euro may challenge support around 1.36 against the
loonie and 1.49 against the aussie.
The euro was down at 1.6159 against the kiwi. The euro is seen
finding support around the 1.58 level.
The pound rose to 1.3082 against the greenback and 1.2303
against the franc, up from its early lows of 1.3026 and 1.2258,
respectively. The pound is likely to face resistance near 1.34
against the greenback and 1.25 against the franc.
The pound reached as high as 154.73 against the yen, which was
its highest level since March 3. On the upside, 157.00 is likely
seen as the next resistance level for the currency.
Looking ahead, Canada inflation data, U.S. retail sales and
export and import prices, all for February, business inventories
data for January and NAHB housing market index for March will be
released in the New York session.
At 2:00 pm ET, the Fed announces its decision on interest rate.
The central bank is expected to raise the target range for the
federal funds rate by 25 basis points to 0.25 percent to 0.50
percent.
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