Euro Weakens Ahead Of ECB Decision
26 April 2017 - 6:42PM
RTTF2
The euro declined against its major opponents in the European
session on Wednesday, as investor sentiment faded amid weak oil
prices and corporate earnings results and attention shifted to
European Central Bank meeting tomorrow for any change in its policy
stance.
ECB rate setters are gathering in Frankfurt for a 2-day meeting
ending tomorrow, with economists expecting no changes in key
interest rates or asset purchase program. This will be followed by
the ECB President Draghi's regular post-meeting press conference,
where he is unlikely to give signs on withdrawing its stimulus
support despite a pick-up in inflation.
The bank is expected to keep its refi rate at zero percent,
marginal lending facility at 0.25 percent and the deposit rate at
-0.4 percent. The amount of the central bank's monthly bond-buying
program was lowered to €60 billion from April.
As the euphoria from Macron's victory fades, investors are now
waiting to see whether U.S. President Donald Trump will stick with
his campaign pledge to slash the corporate tax rate from 35 percent
to 15 percent. The White House is expected to unveil the outlines
of the tax plan later today.
Data from the Economy Ministry showed that Germany's economy is
likely to expand more than previously projected in 2017.
The ministry forecast 1.5 percent growth this year and 1.6
percent in 2018. The projection for 2017 was raised from 1.4
percent.
The euro showed mixed performance in the Asian session. While
the currency rose against the greenback and the yen, it held steady
against the franc and the pound.
The euro dropped to 1.0882 against the greenback, 120.95 versus
the yen and 0.8483 against the pound, from its early 5-1/2-month
high of 1.0951, multi-week high of 121.98 and a new 2-week high of
0.8531, respectively. If the euro extends decline, it may find
support around 1.07 against the greenback, 118.00 against the yen
and 0.82 against the pound.
The single currency eased to 1.4762 against the loonie, 1.5762
against the kiwi and 1.4520 against the aussie, from its previous
high of 1.4855, near 1-year high of 1.5841 and near a 4-month high
of 1.4583, respectively. The euro is seen finding support around
1.46 against the loonie, 1.54 against the kiwi and 1.42 against the
aussie.
Reversing from an early high of 1.0869 against the franc, the
euro edged down to 1.0829. On the downside, the euro may challenge
support around the 1.06 level.
Survey by the Credit Suisse bank and the CFA Society Switzerland
showed that Swiss financial analysts' economic expectations for the
next six months weakened in April.
The Credit Suisse CFA Society Switzerland Indicator fell to 22.2
points in April from 29.6 point in March, which was the highest
since January 2014.
Looking ahead, U.S. crude inventories data is set for release in
the New York session.
Euro vs Yen (FX:EURJPY)
Forex Chart
From Mar 2024 to Apr 2024
Euro vs Yen (FX:EURJPY)
Forex Chart
From Apr 2023 to Apr 2024