Euro Climbs As European Stocks Rise
23 September 2020 - 5:48PM
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The euro advanced against its key counterparts in European deals
on Wednesday, as European shares rose after Federal Reserve
Chairman Jerome Powell asserted the Fed's commitment to use all of
its monetary policy tools for as long as necessary to support the
economy.
Powell said that recent economic indicators show marked
improvement, although the path ahead remained highly uncertain.
Fed's Powell will testify before the House Panel later in the
day.
Better-than-expected Eurozone manufacturing PMI data also
supported the currency.
Flash survey data from IHS Markit showed that Eurozone
manufacturing Purchasing Managers' Index rose to a 25-month high of
53.7. Economists had forecast the reading to rise to 51.9 from 51.7
in August.
Separate data showed that German private sector continued to
expand in September, albeit at a slower pace.
The composite output index dropped to 53.7 in September from
54.4 in August. The expected reading was 54.1.
The euro recovered to 123.05 against the yen, up from a 2-day
low of 122.58 seen at 3:15 am ET. The euro is likely to challenge
resistance around the 126.00 level, if it rises further.
Bank of Japan Governor Haruhiko Kuroda said that the central
bank will not hesitate to take additional easing measures if
required in the wake of highly uncertain economic and financial
situation generated by the corovavirus pandemic.
He observed that the economy seems to have started to pick up
with economic activity resuming gradually, although it has remained
in a severe situation.
The European currency reached as high as 1.0777 against the
franc, setting a 2-day high. The euro is seen finding resistance
around the 1.10 level.
The euro edged up to 0.9218 against the pound from Tuesday's
closing quote of 0.9192. On the upside, 0.94 is likely seen as its
next resistance level.
After falling to nearly a 2-month low of 1.1672 at 2:15 am ET,
the single currency rebounded to 1.1719 against the greenback. The
euro is poised to find resistance around the 1.18 level.
The euro appreciated to a 4-week high of 1.6441 against the
aussie, while approaching 1.7772 versus the kiwi, which was its
highest level since September 11. The currency ended Tuesday's
trading session at 1.6321 against the aussie and 1.7628 versus the
kiwi. The next possible resistance for the euro is seen around 1.69
against the aussie and 1.80 versus the kiwi.
The euro rebounded to 1.5610 against the loonie, off its Asian
session's 6-day low of 1.5541. Next key resistance for the euro is
likely seen around the 1.58 level.
Looking ahead, U.S. Federal Housing Finance Agency's house price
index for July is set for release in the New York session.
At 10:00 am ET, Federal Reserve Chair Jerome Powell will testify
on the economic impacts of COVID-19 before the House Select
Committee in Washington DC.
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