Euro Higher As ECB Minutes Point To Stabilizing Growth
January 16 2020 - 3:24AM
RTTF2
The euro drifted higher against its most major counterparts in
the European session on Thursday, after the European Central Bank's
minutes from the latest meeting struck a positive note on economy,
indicating that there were some signs of stabilization in euro area
growth.
Members broadly agreed that recent economic data and survey
information pointed to a weak, yet stabilizing growth dynamics, the
minutes of the December 11-12 Governing Council meeting showed.
Inflation developments had remained subdued overall, but there
were some indications of a slight increase in measures of
underlying inflation in line with previous expectations.
Members suggested that the monetary policy measures would
provide the necessary monetary stimulus to support the
stabilization of economic growth and the attainment of inflation
towards the Governing Council's aim.
Members expressed confidence that policy rates had not yet
reached the so-called reversal rate. Credit conditions in the euro
area had continued to improve and the overall impact on bank
profitability had remained positive, the minutes showed.
Final data from the Federal Statistical Office showed that
Germany's consumer price inflation rose in December as initially
estimated.
The consumer price index rose 1.5 percent year-on-year in
December, following a 1.1 percent increase in November and October.
This was in line with initial estimate.
The currency traded mixed against its major rivals in the Asian
session. While it rose against the yen and the franc, it held
steady against the greenback and the pound.
The euro appreciated to 1.4564 against the loonie, from a low of
1.4536 seen at 4:45 am ET. The euro is seen locating resistance
around the 1.48 mark.
After a brief slide, the euro climbed to a 9-day high of 1.1173
against the greenback. The pair had finished yesterday's deals at
1.1150. The euro is likely to test resistance around the 1.15
region, if it gains again.
Extending early gains, the euro climbed to a 5-1/2-month high of
122.87 against the yen. The pair was valued at 122.53 when it ended
trading on Wednesday. The euro may face resistance around the
125.00 region.
Data from the Bank of Japan showed that Japan producer prices
fell 0.1 percent on month in December - in line with expectations
and slowing from 0.2 percent in November.
On a yearly basis, producer prices were up 0.9 percent - again
matching forecasts and up from 0.1 percent in the previous
month.
The euro recovered to 1.0756 against the franc, from near a
3-year low of 1.0732 hit at 4:30 am ET. Should the euro strengthens
further, 1.10 is found as its resistance level.
In contrast, the euro remained lower against the pound, with the
pair trading at 0.8544. This followed a high of 0.8561 it logged at
3:15 am ET. The euro is poised to challenge support around the 0.82
mark.
The Residential Market Survey from the Royal Institution of
Chartered Surveyors showed that UK housing market sentiment
strengthened in December following the result of general
election.
The headline new buyer enquiries indicator rose notably to +17
percent from -5 percent in November.
The U.S. business inventories for November and NAHB housing
market index for January are scheduled for release in the New York
session.
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