News Column

Euro Rises Ahead Of ECB Rate Decision

May 8, 2014



OTTAWA (Alliance News) - The euro rose against most major currencies in early European deals on Thursday, as traders focus on the European Central Bank's monetary policy decision due today.

Most economists expect the bank to maintain benchmark rate at 0.25% in the meeting. The deposit rate is seen on hold at zero %.

At 8:30 am ET, the European Central Bank President Mario Draghi holds press conference in Brussels.

Last month the ECB chief raised concern about the strong euro and its impact on inflation rate, which stands below the central bank's target of 2%.

Meanwhile, recent data out of the area suggests that the region is showing slow but steady economic recovery, dimming the likelihood of ECB action in today's meeting.

In economic news, German industrial production decreased unexpectedly in March, official data showed today.

Industrial production fell 0.5% in March from February, Destatis reported. Production advanced 0.6% in February and 0.4% in January.

The euro climbed to a 2-day high of 0.8218 against the pound, after having fallen to 0.8201 in early deals. The euro is likely to challenge resistance around the 0.83 zone.

UK house prices declined for the second consecutive month in April, a report published by Lloyds Banking Group showed today.

House prices were down unexpectedly by 0.2% from March, when prices were down by 1.2%.

Rebounding from an early 2-day low of 1.3904 against the greenback, the euro hit a 2-day high of 1.3939. If the euro continues its uptrend, 1.405 is seen its next resistance level. The pair was worth 1.3909 when it closed deals yesterday.

The euro advanced to 141.93 against the yen, after sliding to 141.50 at 2:05 am ET. The next possible resistance for the euro is seen around the 143.00 mark. At yesterday's close, the pair traded at 141.66.

The euro recovered from an early low of 1.6045 against the kiwi and hovered around weekly high of 1.6099 set in Asian trading. The pair finished yesterday's deals at 1.6052.

The euro edged up to 1.5172 against the Canadian dollar, from a low of 1.5140 hit earlier. The euro is likely to test resistance around the 1.525 zone.

After edging down to 1.2182 against the franc at the commencement of the Asian session, the euro has been moving sideways since then. The pair was trading around 1.2188, near where it closed deals on Wednesday.

The Bank of England's interest rate announcement is due at 7:00 am ET. The bank is seen to keep rates on hold at 0.50%.

The US weekly jobless claims for the week ended May 3 and Canada house price index for March are slated for release in the New York session.

The Federal Reserve Chair Janet Yellen will testify before the Senate Budget Committee at 9:30 am ET.



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Source: Alliance News


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