Euro Lower As ECB Warns Of Currency's Appreciation
03 September 2020 - 1:49PM
RTTF2
The euro declined against its major counterparts in the Asian
session on Thursday, following a media report that the European
Central Bank is concerned about the strength of the currency.
The Financial Times reported that the ECB is worried about the
euro's rise, which threatens the bloc's economic recovery.
The report came after remarks from ECB chief economist Philip
Lane on the exchange rate level that sparked a reversal of some of
the euro's recent strength on Wednesday.
Lane said that the euro-dollar rate "does matter" for monetary
policy, hinting that policymakers are uncomfortable with the
currency's strength.
The ECB will meet next week, with investors expecting further
action to boost the economy.
Investors await U.S. weekly jobless claims and jobs report for
more direction.
The euro depreciated to 1-1/2-month lows of 1.5429 versus the
loonie, 1.6138 versus the aussie and 1.7470 versus the kiwi, after
rising to 1.5470, 1.6181 and 1.7523, respectively in early deals.
The next likely support for the euro is seen around 1.52 versus the
loonie, 1.57 versus the aussie and 1.72 versus the kiwi.
The European currency slid to 0.8866 versus the pound, its
lowest level since June 9. If the euro drops further, 0.86 is
possibly seen as its next support level.
The single currency fell to a 3-day low of 1.0771 against the
franc from Wednesday's closing value of 1.0795. Versus the yen, it
recorded a 6-day low of 125.29. Next key support for the euro is
likely seen around 1.05 against the franc and 121.00 versus the
yen.
The euro fell below the key 1.18 level against the U.S.
currency, touching a 1-week low of 1.1789. The euro is likely to
find support around the 1.15 region.
Looking ahead, PMI reports from major European economies and
Eurozone retail sales for July are due in the European session.
U.S. and Canadian trade data for July, U.S. weekly jobless
claims for the week ended August 29 and ISM non-manufacturing
composite index for August will be out in the New York session.
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