Euro Falls Ahead Of ECB Announcement
21 July 2021 - 1:13PM
RTTF2
The euro came under pressure in the Asian session on Wednesday,
ahead of monetary policy announcement by the European Central Bank,
which is expected to adjust its forward guidance, reflecting the
new 2 percent inflation goal adopted by the central bank under the
new strategy unveiled earlier this month.
The ECB is expected to leave its key rates and the pandemic
emergency purchase programme unchanged when it concludes its
rate-setting meeting on Thursday.
The policy statement will incorporate its recently adopted
symmetric inflation target of 2 percent in the medium term, instead
of its previous goal of "below, but close to, two per cent."
ECB President Lagarde remarked that the PEPP program would
continue until "at least" March 2022.
The central bank is expected to adjust its forward guidance on
monetary stimulus in order to align with its new strategy.
The new strategy allows the ECB to retain interest rates at
record lows for longer periods, while tolerating higher
inflation.
The euro pulled back from a 2-day high of 129.56 against the
yen, with the pair trading at 129.22. On the downside, 128.00 is
likely seen as its next support level.
The euro eased off to 1.0843 against the franc and 1.1762
against the greenback, after rising to 1.0854 and 1.1783,
respectively in early deals. The euro is likely to face support
around 1.06 against the franc and 1.16 against the greenback.
In contrast, the single currency appreciated to near a 7-month
high of 1.6130 against the aussie from Tuesday's close of 1.6062.
If the euro rises further, 1.64 is likely seen as its next
resistance level.
The euro reversed from an early 2-day low of 1.4928 against the
loonie and rose to 1.4975. Against the kiwi, the euro edged up to
1.7057 from yesterday's close of 1.7016. The euro is poised to find
resistance around 1.52 against the loonie and 1.72 against the
kiwi.
The euro ticked up to 0.8655 against the pound, from a low of
0.8636 seen at 5 pm ET. The euro may find resistance around the
0.88 level.
Looking ahead, Canada new housing price index for June is
scheduled for release in the New York session.
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