Euro Climbs On ECB Rate Hike Talk Rumors
March 19 2018 - 5:05AM
RTTF2
The euro advanced against its key counterparts in the European
session on Monday, after a media report showed that the policy
makers of the European Central Bank have moved their debate to the
course of rate hike in 2019 and are of the view that QE program
should end this year.
While the policymakers are broadly comfortable with a rate hike
by mid-2019, there are differences about the steepness of the rate
path subsequently due to a slow rebound in inflation, Reuters
report showed.
"The only point in extending the program would be to push out
rate hike expectations and anchor the yield curve," sources
said.
"But that can be done with other tools, like a more precise
forward guidance or more long-term refinancing operations."
Data from Eurostat showed that the Eurozone trade surplus
declined to a three-month low in January as exports declined amid
an increase in imports.
The trade surplus came in at seasonally adjusted EUR 19.9
billion versus a EUR 23.2 billion surplus in December. This was the
lowest since October 2017.
Separate data showed that Eurozone construction output decreased
for the first time in seven months in January.
Construction output fell a seasonally adjusted 2.2 percent
month-over-month in January, reversing a 0.7 percent rise in
December, which was revised up from a 0.1 percent increase reported
earlier.
The currency showed mixed trading against its major counterparts
in the Asian session. While it fell against the greenback and the
yen, it held steady against the pound and the franc.
The euro climbed to 1.2326 against the greenback, from more than
a 2-week low of 1.2258 hit at 1:45 am ET. The euro is seen finding
resistance around the 1.24 level.
The single currency advanced to a 4-day high of 130.97 against
the yen, off its 2-week low of 129.61. On the upside, 133.00 is
likely seen as the next resistance level for the euro.
Preliminary figures from the Ministry of Finance showed that
Japan's exports and imports grew more-than-expected in
February.
The value of exports climbed 1.8 percent year-over-year in
February, faster than the 1.4 percent rise economists had
forecast.
The euro firmed to 1.1735 against the Swiss franc, its strongest
since March 8. The next possible resistance for the euro is seen
around the 1.22 level.
The euro strengthened to an 11-day high of 1.7083 against the
kiwi and more than a 2-year high of 1.5995 against the aussie, from
its early lows of 1.6988 and 1.5900, respectively. If the euro
rises further, it may find resistance around 1.73 against the kiwi
and 1.62 against the aussie.
The 19-nation currency bounced off to 1.6110 against the loonie,
from an early low of 1.6056. Next key resistance for the euro is
likely seen around the 1.63 level.
On the flip side, the euro fell to near a 6-week low of 0.8745
against the pound, compared to 0.8809 hit late New York Friday.
Further downtrend may see the euro challenging support around the
0.86 level.
Data from property website Rightmove showed that house prices in
London continued to decrease in March.
Home prices dropped 0.6 percent annually in March to GBP
631,651. Nonetheless, prices climbed 0.6 percent from February.
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