News Column

Euro Advances As European Stocks Rise

June 17, 2014

CANBERA (Alliance News) - The euro climbed against most major currencies in European deals on Tuesday, as European stocks advanced, tracking small gains on Wall Street, although ongoing crisis in Iraq weighed on sentiment.

Traders focus on 2-day policy meeting by the US Federal Reserve that starts today. The Fed is expected to cut its monthly bond buying program by USD10 billion to USD35 billion amid signs of improvement in the economy. The Fed will also release updated projections for interest rates, growth, inflation and unemployment.

The survey data from the Mannheim-based Centre for European Economic Research/ZEW showed that Germany's economic confidence weakened for the sixth successive month in June.

The economic sentiment index fell unexpectedly to 29.8 in June, the lowest reading since December 2012, from 33.1 in May. The score was forecast to rise to 35.

The euro climbed to a 5-day high of 0.8007 against the Sterling, reversing from its early low of 0.7982. On the upside, the euro may find resistance around the 0.81 zone.

UK inflation eased to the lowest since October 2009 due to a fall in transport and food costs, the Office for National Statistics showed today.

Inflation fell to 1.5% in May from 1.8% in April, when it was expected to drop marginally to 1.7%.

The euro which ended yesterday's trading at 138.17 against the yen rose to a 4-day high of 138.53. If the euro extends its ascending trend, 139.00 is seen as its next resistance level.

The single currency appreciated to a session's high of 1.2186 versus the franc. The next possible upside target for the euro lies around the 1.225 region.

The Swiss government's expert panel lowered the growth forecasts for the economy for this year and next, citing sluggish recovery in exports, the State Secretariat for Economic Affairs SECO said today.

The growth outlook for this year was cut to 2% from 2.2% and the projection for next year was reduced to 2.6% from 2.7%.

The euro was steady against the greenback with pair trading at 1.3560, after climbing to a weekly high of 1.3586 in early Asian deals. At yesterday's close, the pair was quoted at 1.3572.

The 18-nation currency strengthened to a 1-week high of 1.4525 against the aussie and a 4-day high of 1.5683 against the kiwi. The euro may test resistance around 1.46 against the aussie and 1.57 against the kiwi.

The euro rose to 1.4743 against the Canadian unit, from Monday's closing quote of 1.4716. Next key upside target level for the euro may be eyed around 1.48.

Looking ahead, the US CPI, housing starts and building permits - all for May are scheduled for release in the New York session.

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Source: Alliance News

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