Euro Advances Amid Strong German Ifo Survey, Lagarde's Remarks
May 23 2022 - 2:59AM
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The euro drifted higher against its major counterparts in the
European session on Monday, as German business sentiment improved
in May and European Central Bank President Christine Lagarde said
that the central bank is planning to exit negative interest rates
by the end of the third quarter.
In a blog post, Lagarde said that the central bank is expected
to end net purchases under the APP very early in the third
quarter.
A lift-off in the interest rate is likely at the meeting in
July, in line with the forward guidance, Lagarde told.
"Based on the current outlook, we are likely to be in a position
to exit negative interest rates by the end of the third
quarter."
Survey results from the Ifo institute showed that Germany's
business climate index rose to 93.0 points in May from a revised
91.9 points in April. Economists had expected a score of 91.4.
The World Economic Forum's annual meeting will be held in
Switzerland this week after a gap of two years amid the Covid-19
pandemic.
Business and political leaders will be gathering in Davos, where
Ukraine and its war with Russia would be at the top of the
agenda.
The euro rose to 0.8495 against the pound, from a 6-day low of
0.8433 seen at 3:15 am ET. If the euro rises further, 0.86 is
likely seen as its next resistance level.
The euro touched a 5-day high of 136.30 against the yen and a
4-day high of 1.0335 against the franc, off its early lows of
134.66 and 1.0274, respectively. The euro is seen finding
resistance around 138.00 against the yen and 1.06 against the
franc.
The euro firmed to 1.0688 against the greenback, its highest
level since April 26. Against the loonie, it approached nearly a
2-week high of 1.3663. The euro is likely to find resistance around
1.08 against the greenback and 1.38 against the loonie.
The single currency rebounded to 1.5022 against the aussie and
1.6498 against the kiwi, from its prior multi-week lows of 1.4885
and 1.6367, respectively. The euro is poised to test resistance
around 1.53 against the aussie and 1.68 against the kiwi.
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