The euro advanced against its most major opponents in the
European session on Thursday, after the European Central Bank
offered an optimistic assessment for the euro area, estimating a
continued robust growth momentum in the second half of this
year.
In its latest economic bulletin, the European Central Bank said
that Eurozone's robust economic recovery continued in the second
half of this year, supported by domestic demand and an upswing in
investment.
"The solid and broad-based economic expansion in the euro area
is continuing; the latest data and survey results point to unabated
growth momentum in the second half of this year," the bank said in
the bulletin.
"Risks surrounding the euro area growth outlook remain broadly
balanced," the ECB added.
The currency was also underpinned by an upgrade in the European
Commission's growth projections for the euro area.
In the Autumn Forecast, the EU said the currency bloc will grow
2.2 percent this year instead of prior projection of 1.7
percent.
Speaking to the European Parliament in Brussels, the ECB's Chair
of the Supervisory Board Daniele Nouy said that regulatory efforts
must be adopted now, when the euro area economy is in strong shape,
to avoid a massive build-up of bad bank loans in future.
The ECB had floated new guidelines regarding extra provisioning
by banks for bad loans. These guidelines are open for public
consultation until December 8.
In other economic releases, data from Destatis showed that
Germany's exports declined less than expected in September, while
imports dropped unexpectedly from August.
Exports fell 0.4 percent month-on-month in September, reversing
a 2 percent rise in August. Shipments were forecast to decline 1.3
percent.
The currency showed mixed trading in the Asian session. While it
rose against the greenback and the yen, it held steady against the
pound. Against the franc, the euro fell.
The euro advanced to a 6-day high of 1.1644 against the
greenback, after having fallen to 1.1586 at 8:30 pm ET. If the euro
rises further, 1.18 is possibly seen as its next resistance
level.
The single currency bounced off to 132.02 against the Japanese
yen, from a low of 131.52 hit at 3:45 am ET. The currency has
already set a 2-day peak of 132.26 early in the Asian session.
Continuation of the euro's uptrend may see it challenging
resistance around the 134.00 mark.
Data from the Cabinet Office showed that Japan core machine
orders plunged a seasonally adjusted 8.1 percent on month in
September, standing at 1.027 trillion yen.
That missed expectations for a decline of 2.0 percent following
the 3.4 percent gain in August.
Having fallen to 0.8824 against the pound at 3:30 am ET, the
euro reversed direction and rose to a 3-day high of 0.8874. The
euro is seen finding resistance around the 0.90 area.
Survey by the Royal Institution of Chartered Surveyors showed
that the U.K. house price balance narrowed in October, gaining just
1.0 percent.
That missed forecasts for an increase of 4.0 percent and was
down from 6.0 percent in September.
The 19-nation currency rose to 1.4784 against the loonie, 1.5144
against the aussie and 1.6704 against the kiwi, from its early low
of 1.4746, 2-day low of 1.5084 and 3-week low of 1.6623,
respectively. On the upside, the euro may target resistance around
1.49 against the loonie, 1.53 against the aussie and 1.68 against
the kiwi.
On the flip side, the euro fell to 1.1571 against the franc,
from a 3-day high of 1.1619 hit at 5:25 am ET. The next possible
support for the euro is seen around the 1.14 mark.
Data from the State Secretariat for Economic Affairs showed that
Switzerland's unemployment rate remained stable in October.
The jobless rate held steady at seasonally adjusted 3.1 percent
in October and in line with expectations. On an unadjusted basis,
the unemployment rate remained unchanged at 3 percent.
At 8:15 am ET, the ECB executive board member Yves Mersch speaks
on "Turbulent times for the European financial industry" at 1st
annual forum Banking & Technology in Vienna, Austria.
Half an hour later, the ECB Vice President Vitor Constancio
speaks at Rome regulatory conference.
In the New York session, Canada new housing price index for
September, U.S. weekly jobless claims for the week ended November 4
and wholesale inventories for September are due.
At 11:30 am ET, the Swiss National Bank Chairman Thomas Jordan
delivers a speech titled "Independence of Central Banks after the
Financial Crisis: The Swiss Perspective" at the Center for
Financial Studies Presidential Lecture, in Frankfurt.
At 1:20 pm ET, ECB Board member Sabine Lautenschlager gives
speech at the "Monetary, Financial, and Prudential Policy
Interactions in the Post-Crisis World" conference organized by
BoE/HKMA/IMF in Washington D.C., USA.
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