Euro Drops Amid Risk Aversion; ECB Decision In Focus
27 April 2017 - 5:02PM
RTTF2
The euro edged down against its key counterparts in the European
session on Thursday amid rising risk aversion, as U.S. President
Donald Trump's long-touted tax plan for big corporate and personal
tax cuts offered few details and investors waited to hear from ECB
President Mario Draghi.
The highly anticipated tax plan outline released by U.S.
President Donald Trump failed to inspire investors, as it offered
no specifics on how the tax cuts would be paid for without
increasing the budget deficit.
The tax plan included a cut in the corporate tax rate and small
businesses to 15 percent, from the current 35 percent and 39.6
percent, respectively.
The European Central Bank is broadly expected to maintain the
status quo on rates, but Draghi may hint at revising forward
guidance as early as June.
Oil prices are lower, after official data showed a surge in
gasoline inventories last week, even as crude stockpiles
declined.
In a campaign trip to the factory in Amiens on Wednesday, French
election candidate Emmanuel Macron was snubbed by striking factory
workers after his far-right rival Marine Le Pen rushed to the
factory gates in an attempt to outdo him.
A poll released by Harris Interactive showed that 52 percent of
French people is of the opinion that Macron has not performed well
in the start of the campaign for the run-off, while 61 percent said
that Le Pen had a successful launch.
Survey data by the European Commission showed that Eurozone
economic sentiment rose to its highest level since the middle of
2007 in April with strong improvements in all components.
The economic sentiment indicator climbed to 109.6 from a revised
108 in March. Economists had forecast a modest improvement to 108.2
from March's original 107.9.
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. Against the pound, it dropped.
The euro eased back to 121.19 versus the yen, from a high of
121.63 hit at 4:30 am ET. The euro is seen finding support around
the 118.00 region.
The Bank of Japan kept its monetary stimulus unchanged as widely
expected.
Governor Haruhiko Kuroda and his board members decided by an 7-2
majority vote to hold its target of raising the amount of
outstanding JGB holdings at an annual pace of about JPY 80
trillion.
The euro dropped to 1.0892 against greenback and 1.0820 against
the franc, off its previous highs of 1.0921 and 1.0843,
respectively. Continuation of the euro's downtrend may see it
challenging support around 1.07 against the greenback and 1.06
against the franc.
The euro hit a 9-day low of 0.8443 against the pound, after
having advanced to 0.8495 at 8:15 pm ET. On the downside, the euro
may target support around the 0.83 mark.
Looking ahead, the European Central Bank announces its decision
on interest rates at 7:45 am ET. The bank is expected to keep its
refi rate at zero percent and the deposit rate at -0.4 percent.
At 8:00 am ET, German flash inflation for April is set for
release.
In the New York session, U.S. weekly jobless claims for the week
ended April 22, advance goods trade balance, wholesale inventories,
durable goods orders and pending home sales - all for March are
due.
Euro vs Sterling (FX:EURGBP)
Forex Chart
From Apr 2024 to May 2024
Euro vs Sterling (FX:EURGBP)
Forex Chart
From May 2023 to May 2024